PETALING JAYA: MSM Malaysia Bhd swung into the red registering a net loss of RM185.1 million for the third quarter ended Sept 30, 2019 against a net profit of RM15.88 million in the previous corresponding period, due to lower average selling price, higher refining cost, higher finance cost and provision of RM137.35 million for the impairment of plant and machinery.
Its revenue fell 5.4% to RM531.42 million from RM561.68 million.
MSM told Bursa Malaysia that the average selling price dropped 3% and 4% for domestic and industry segments respectively, as a result of disruptions in the domestic market and a 40% cutback in export volumes due to stiff competition in the export market.
“Besides that, production costs escalated by 39% for two main reasons, namely, the commercialisation of MSM Sugar Refinery Johor Sdn Bhd in April this year that include its lower capacity utilisation and depreciation, as well as increase in gas tariffs in January 2019 and July 2019.”
For the first nine months of the year, MSM incurred a net loss of RM259.49 million versus a net profit of RM46.01 million in the same period last year, while revenue slipped 11.4% to RM1.49 billion from RM1.68 billion.
Going forward, the group said it will continue to pursue strategic initiatives in 2019 to improve financial performance and ensure sustainable business amid challenging internal and external factors as well as slower Malaysian economic growth.
MSM aims to export more than 100,000 tonnes of its sugar products to the Asian region by 2021.
“We intend to penetrate the large sugar premix and syrup markets mainly in Asian region, where current total estimated demand is between three million tonnes and four million tonnes a year respectively. This would be the starting point for MSM to expand its global footprint, also allowing us to diversify revenue streams through product diversification and new product development,” its CEO Khairil Anuar said.
