KUALA LUMPUR: MSM Malaysia Holdings Bhd foresees demands in the local and export markets to be stronger moving forward but the high input costs continue to impede the improvement of the group’s financial performance.
“We are delighted with the government’s announcement yesterday to allow the local sugar industry to produce pure white refined sugar with prices to be determined by market forces. This will allow us to be more resilient against high input costs.
“MSM will continue to endeavour in returning to the black sustainably despite these input cost challenges,” MSM group chief executive officer Syed Feizal Syed Mohammad said in a statement.
He said the sugar industry was faced with a prolonged high input cost environment owing to the rise in cost of raw sugar, freight, natural gas and volatility of Ringgit Malaysia.
“Other input costs such as packaging materials, utilities and inland logistics have also increased significantly,” he added.
The sugar refiner posted a wider net loss of RM35.9mil, or loss per share of 5.10 sen from RM27.7mil, or 3.94 sen a year ago, as a result of lower margins and higher operating costs.
The group faced higher production cost driven by 5.2% higher foreign exchange and 65% increase in gas cost which resulted into higher refining cost.
Revenue for the quarter was marginally at RM588.4mil against RM595.9mil in the same quarter a year ago due to reduced export sales volume in order to prioritise local sales demand.
Meanwhile, MSM intends to grow the export footprint further between 12-15% in the near term.
“Global sugar prices have been bullish due to food security concerns and global demand outstripping production. The export market attractiveness will spur MSM volumes into China, Philippines and Indonesia,” it said.