Malayan Flour Mills Berhad deliver profits in the second quarter  posting a group net profit of RM18.8 million, a significant turnaround from a net loss of RM2.0 million in the same quarter previous year.

The group said the better net profit was mainly driven by improved profit margins in the Group's Flour and Grain Trading (FGT) segment, principally in Malaysia and Vietnam. During the quarter, the FGT segment together with the Aquafeed business recorded a profit after tax of RM21.5 million, reversing the loss after tax of RM1.3 million reported in the corresponding quarter last year, despite a relatively flat revenue of RM751.9 million. The strong performance was primarily driven by improved margins due to lower wheat consumption costs.

Meanwhile, its Poultry Integration (PI) segment, operated under the 51.0%-owned joint venture company – Dindings Tyson Sdn Bhd (DTSB), improved significantly in 2Q24 with a profit after tax of RM8.4 million, versus a loss of RM2.4 million in the preceding quarter of 1Q24. The quarter-to- quarter turnaround performance was the result of higher sales volume and lower input costs; the loss in 1Q24 was largely due to the continued boycott of Western-based fast-food chains in response
to the current Middle East geopolitical conflict.

However, compared to the same quarter last year, the PI segment saw a lower profit in 2Q24 due to reduced sales volume, lower selling prices, and the discontinuation of the chicken subsidy. On the basis of equity accounting, MFM's share of profit from PI declined by 23.2% to RM4.3 million compared to RM5.6 million in the previous year's same quarter.

Executive Deputy Chairman cum Managing Director of Malayan Flour Mills Berhad, Mr. Teh Wee Chye said: "While our FGT segment continues to demonstrate strong performance, driving our 2Q24 growth, we are particularly encouraged by the significant improvement in our PI segment compared to the preceding quarter. This positive momentum, despite the uncertainties brought on by the geopolitical crisis, indicates that chicken meat remains a preferred choice in the country.

For the first half ended 30 June 2024 (1H24), the Group's net profit surged more than six folds to RM56.7 million from RM8.5 million previously, despite revenue decreasing by 4.8% to RM1.5 billion from RM1.6 billion a year ago.

MFM declared an interim dividend of 1.5 sen per share in respect of the financial year ending 31 December 2024, with an ex-date on 12 September 2024 and a payment date on 27 September 2024. The dividend payout of RM18.6 million amounts to 32.8% of 1H24 net profit attributable to shareholders.