KUALA LUMPUR: MSM Malaysia Holdings Bhd has narrowed its net loss to RM71.21 million in the third quarter (Q3) ended September 30, 2020 from a net loss of RM185.1 million in the same quarter last year.
In a filing to Bursa Malaysia today, MSM said this was attributable to higher overall margin of 7.21 per cent and lower operating cost.
The company's revenue increased 11.8 per cent to RM594.55 million from RM531.69 million previously, due to increased in export sales volume.
For the nine-month period, MSM's net loss was slashed by more than half to RM127.47 million from RM259.49 million, while revenue grew 4.2 per cent to RM1.55 billion from RM1.49 billion.
MSM said the outlook for Q4 remained challenging with economic disruption in the country due to the conditional Movement Control Orders (MCO) to curb the spread of Covid-19.
"As conditional MCO results in lesser social gatherings and limited travel, it will take some time before national sugar consumption returns to its pre-pandemic levels.
"Internationally, export destination port closures seen in previous quarter had reopened, providing steady export revenues to the group."
Despite the challenges, MSM said it was on track to increase capacity utilisation of MSM Johor, which would reduce production cost and improve margins.
"MSM expects the business environment to remain challenging in the final quarter of the year, but remains optimistic on its turnaround plan and the group's ability in achieving sustainable growth," it said.
In a separate statement, MSM said it had writen off RM27.2 million during the quarter, involving bearer plants on the rubber plantation affected by fire in Chuping, Perlis.
It wrote off a further net impairment adjustment of RM35.7 million following the change in accounting treatment of the same assets due to cancellation of earlier sale plan.
The two impairments ultimately resulted in a RM57.4 million pre-tax losses for the quarter.
Excluding the impairments, MSM will have posted an operational profit of RM5.6 million for Q3.
"MSM continues to show resilience in optimising domestic market, delivering export growth and enriching product offerings to fulfil customers' requirements.
"Our two processing plants in Prai and Johor have also recorded operational improvements on the back of few technical setbacks in Johor as we strive to deliver sustainable performance." said MSM acting group chief executive officer Fakhrunniam Othman.
He said MSM had generated better processing yield and refining cost by 3.0 per cent and 13 per cent respectively compared to Q3 of 2019.
"The development of our value-added products for exports, consolidation of refining capacity and demarcation of markets have gradually brought about improvement in our products delivery to customers. Despite the global pandemic challenges and weak outlook in some industries, we remain committed to execute our turnaround plan and growth strategies," he added.
MSM has introduced new packaging for its refined sugar products which includes coarse grain, fine granulated, soft brown, castor and icing.
The new packaging reflects 'Gula Prai' as a trusted brand, with over 50 years of experience in sugar refining industries, sweetening lives of Malaysians since 1964.
The classic oval shape that resembles a spoonful of sugar and the different colours representing each type of sugar remains the same with modernised graphic.
The new packaging has gradually entered the market from September.
MSM has also started exporting its new products in form of liquid sugar, fine syrup and premixes.
The new sugar-based products are part of the group's diversification program which will see MSM producing and exporting value-added sugar-based products into the market.