KUALA LUMPUR(May 30): Malayan Flour Mills Bhd’s (MFM) net profit for the first quarter ended March 31, 2018 (1QFY18) plunged 93.6% to RM1.6 million, from RM24.91 million in 1QFY17.
The fall in profits was due to higher wheat costs in its flour and grains trading segment coupled with lower sales volume and price of live birds for its poultry integration segment.

Earnings per share for 1QFY18 came in lower at 0.29 sen, compared with 4.53 sen in 1QFY17, the group reported in its filing with the exchange this evening.

Revenue for 1QFY18 fell 6.7% to RM563.82 million from RM604.18 million in the same period a year ago.

“Despite the increase in wheat costs, we have delayed our decision to increase the price of flour, hence maintaining our market share and managed to record a marginal volume increment [in 1QFY18]

“Moving forward, besides continuing with our effort to source raw materials efficiently and optimising our operating costs in order to sustain our margin, we will also be cautiously monitoring the wheat costs movement against the market price and as a last resort we will make the necessary price adjustment in order to sustain our business,” the group said.

As for its poultry segment, MFM said that the lower volume in 1QFY18 is a carry over effect of the production performance issues encountered during the last quarter of year 2017.

“As our breeder flock has a long life cycle period of approximately 16 months, it takes a few months for the farm to recover its performance. As of end 2017, action plans to improve performance were put in place resulting in improvement in day-old chick production, hence we expect performance to normalise by July 2018,” the group said,

Despite the uncertain global economic environment, volatile commodity prices and foreign exchange rates, the board expects the group's performance in 2018 to remain positive.

MFM shares closed down 4 sen or 2.6% to RM1.52 today, for a market capitalisation of RM841.94 million.