KUALA LUMPUR: MAG Holdings Bhd (MAG) staged a turnaround in the third quarter (Q3) ended 30 September 2020 with a net profit of RM5.1 million compared to a net loss of RM5.7 million a year ago.
The improvement in bottomline was achieved thanks to the group's foray into the prawn aquaculture and other seafood products business.
Revenue stood at RM15.3 million as compared to the RM81.1 million registered in Q3 last year.
The drop in revenue was contributed to discontinued operations of its edible oil and peanut trading business.
"The stellar results were primarily driven by the earnings recognition from our prawn aquaculture business, which has been running at optimum capacity since the acquisition was completed at the end of last year," MAG executive chairman Ng Min Lin said in a statement.
A filing with Bursa Malaysia shows that earnings per share were recorded at 0.77 sen from a loss per share of 1.55 sen a year earlier.
"The global food industry and the United Nations have warned that the world is facing the worst food crisis in half a century due to the recessionary pressures caused by the Covid-19 pandemic.
"We believe food company like MAG recognise and respond well to the challenges while preparing for the time after the crisis are best prepared to thrive beyond the crisis," Ng said.
MAG's farm assets in Tawau, Sabah could breed 2,000 tonnes of vannamei (whiteleg shrimp or king prawn) every year.
The seawater prawns are mainly exported in unpeeled and frozen packs to distributors in South Korea (60 per cent), Vietnam (10 per cent) and China (20 per cent), and Malaysia (10 per cent).
For the first nine months of financial year 2020, MAG also returned to the black with a net profit of RM6.3 million from a net loss of RM4.8 million a year ago.
Revenue was 31.6 million as compared to RM521.9 million in the corresponding nine-month period last year.
Ng said since the start of Covid-19 pandemic, there is a spike in the orders of their food products, as there are is a huge shortage in fresh prawn products around the world.
Over the longer term, the group is also looking at setting up a processing plant to process prawns harvested from its farms.
"This will enable the group to offer more value-added products with better margins such as peeled and deveined as well as cooked prawns to a wider geographical markets globally," Ng said.