Malayan Flour Mills Berhad saw a turnaround of its Poultry Integration segment boost the Group’s net profit by 68.6% to RM31.6 million for the second quarter ended 30 June 2022 (2Q22), attributed in part to increasing plant utilization.
The recovery in Poultry Integration in turn resulted in the segment contributing to 2Q22 net profit in a similar quantum as the Flour and Grains Trading segment.
2Q22 revenue for the Flour and Grains Trading segment, which included the Group’s milling and trading operations in Malaysia and Vietnam, rose 14.3% to RM644.4 million mainly due to higher selling prices and improved business sentiments. However, operating profit for the segment slid 15.4% to RM33.1 million on higher wheat cost and stronger US Dollars (USD) which diminished the effect of higher selling prices.
Meanwhile, the Group’s Poultry Integration segment, operated by its joint venture company with Tyson Foods, was back in the black with a profit after tax of RM28.5 million in 2Q22, from a loss of RM36.6 million a year ago. The turnaround was partly due to higher plant utilization, coupled with a subsidy from the Ministry of Agriculture and Food Industries to ease the burden on poultry farmers. MFM’s share of equity accounted for profit for the quarter from the segment came in at RM14.5 million.
Teh Wee Chye, Executive Deputy Chairman of Malayan Flour Mills Berhad said “While the ongoing geopolitical conflict in Ukraine and supply chain disruptions had tempered our financial results, we are encouraged that our integrated and synergistic business model of flour milling and poultry integration will continue to sustain our profitability.
In May 2021, MFM disposed 49% equity interest in its wholly-owned subsidiary, which is the operating company for the Group’s Poultry Integration segment, to Tyson Foods for a price of RM445 million, with the aim of having a strategic partnership with one of the world’s largest meat processors. The joint venture is set to be a game changer for the Group, with positive results already reflected in 2Q22 and expected to sustain beyond 2022.
Since the Tyson Foods tie-up, the Joint Venture company has continued to undertake modernisation of the upstream farming operations, as well as increased sales volume to MacFood Services (M) Sdn Bhd, a subsidiary of Tyson Foods.
For the first half ended 30 June 2022 (1H22), the Group recorded 13.7% lower net profit to RM52 million from RM60.2 million previously, despite revenue rising 16.6% to RM1.3 billion from RM1.1 billion a year ago, mainly attributable to higher raw material cost and USD.
To reward shareholders, MFM declared an interim dividend of 1.5 sen per share in respect of the financial year ending 31 December 2022, with ex-date on 9 September 2022 and payment date on 23 September 2022. The dividend payout of RM15.3 million amounts to 29.4% of 1H22 net profit attributable to shareholders.
