It would take time before national sugar consumption returns to its pre-pandemic levels
by RAHIMI YUNUS
MSM Malaysia Holdings Bhd foresees its fourth quarter (4Q20) earnings to remain under pressure due to reduced sugar demand, impacted by lesser social gatherings and limited travels due to Conditional Movement Control Order.
The group said it would take time before national sugar consumption returns to its pre-pandemic levels, according to an exchange filing yesterday.
Internationally, the group said, the reopening of its export destination ports that were previously closed, will provide steady export revenues to the group.
MSM has narrowed its net loss to RM71.2 million in 3Q20 compared to RM185.1 million registered in the corresponding period last year, attributable to a higher overall margin of 7.21% and a lower operating cost incurred.
Revenue increased by 11.8% to RM594.6 million in 3Q20 from RM531.7 million a year ago, contributed by higher export sales volume.
Despite the challenges, the group said it is committed to increase capacity utilisation of MSM Johor, which will reduce production cost and improve margins.
“MSM continues to show resilience in optimising the domestic market, delivering export growth and enriching product offerings to fulfil customers’ requirements. Our two processing plants in Prai, Penang and Johor have also recorded operational improvements on the back of few technical setbacks in Johor as we strive to deliver sustainable performance,” MSM acting group CEO Fakhrunniam Othman (picture) said in a statement yesterday.
MSM recorded a five fold increase in the volume of exports at 92,000 metric tonnes (MT) in 3Q20 from 19,000MT last year with a higher premium, significantly contributing to its efforts in maximising the group’s capacity utilisation.
Operationally, the group said it generated better processing yield and refining cost by 3% and 13% respectively compared to 3Q19, as a result of greater efficiency, strengthened internal processes and higher capacity utilisation at both refineries.
The brand owner of Gula Prai has introduced new packaging for its refined sugar products which includes coarse grain, fine granulated, soft brown, castor and icing sugar.
The new packaging has gradually entered the market beginning in September 2020.
The company has also started exporting its new products in form of liquid sugar, fine syrup and premixes as part of the group’s diversification programme.