MSM narrows 2Q net losses to RM21.55mil

KUALA LUMPUR: MSM Malaysia Holdings Bhd pared back on its losses in the quarter ended June 30, 2020, to a net loss of RM21.55mil as compared to a net loss of RM67.33mil in the previous corresponding quarter due to higher overall margin and lower finance costs.

This marked the seventh consecutive quarter of losses for the 51%-owned sugar refining arm of FGV Holdings Bhd.

Loss per share narrowed to 3.07 sen from 9.58 sen in the previous corresponding quarter.

The reduced loss was partly attributable to the improved production costs in MSM Sugar Refinery (Johor) Sdn Bhd due to an increase in the utilisation rate to 23% from 19% in the same quarter last year, said MSM in a statement.

Production costs were further reduced by the slower production and cessation of refining activities in MSM Perlis as part of the group's rationalisation plan.

For the quarter under review, the group recorded revenue of RM448.74mil, which was 5% lower than RM474.22mil in the same quarter last year. This was owing to a lower volume of sales in its wholesale segment versus the comparative quarter as domestic sales were disrupted during the movement control order.

”The group has taken strategic approaches to remain competitive amid challenges, while making headway towards turnaround.

"The strategic adjustment in sales focus and price structure alleviates the market volatility to which currently, MSM is strategising to improve its quality of products and supply chain while strengthening sales margin," said
MSM group CEO Datuk Khairil Anuar Aziz.

For the first half of 2020, higher industry and export sales volume offset the 37% decline in the wholesale segment, he added.

Year to date, the group has recorded a net loss of RM56.26mil, which is an improved performance from last year's 1H net loss of RM74.39mil.

Revenue for 1HFY20 was RM959.58mil, which was marginally lower than revenue in the 2019 period.

For the remainder of the year, MSM will focus on sustainable growth strategies such as product diversification to penetrate into export markets.

It added that it will increase capacity utilisation of MSM Johor, which will reduce production cost and improve margins.

As at midday, shares in MSM were trading 1.5 sen or 2.65% higher at 58 sen per unit on the back of 2.69 million shares exchanging hands.
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