MSM Malaysia slips into the red

KUALA LUMPUR: Refined sugar producer MSM Malaysia Holdings Bhd slipped into the red on higher raw material costs and weakening ringgit.

It recorded a second quarter pre-tax loss of RM28.59 million compared with a pre-tax profit of RM31.07 million recorded in the same quarter last year.

In a filing to Bursa Malaysia today, MSM said revenue was up at RM692.45 million for the quarter ended June 2017 versus RM633.85 million posted in the same quarter last year.

“The average raw sugar cost for the group increased by 54 per cent (RM/tonne) compared with the same period last year due to the higher market price of raw sugar, peaking at 20.54 US cents per pound.

“The subsequent decline in the current market price of sugar of about 13.75 cents per pound had adversely impacted the group,” it said.

For the six months, pre-tax loss stood at RM68.15 million versus a pre-tax profit of RM91.63 million, while revenue was reduced to RM1.34 billion versus the previously recorded RM1.18 billion.

MSM said notwithstanding the volatility in commodity prices, the group expected its performance to be in line with the rest of the industry.

“The results are expected to improve in the near-term with the replacement of stocks of raw sugar material at lower market prices,” it added.