MSM net loss narrows 68% in Q2 from higher margins, lower finance cost

PETALING JAYA: MSM Malaysia Holdings Bhd’s net loss narrowed by 68% in its second quarter ended June 30, 2020 from a net loss of RM67.33 million in the same quarter of the previous year attributed to a higher overall margin of 3.8% and lower finance cost.

Revenue for the period came in at RM448.74 million, a 5.4% decline from RM474.22 million reported previously.

The group told the local bourse that it expects the business environment to remain challenging for the rest of 2020.

Moving forward, it will continue to focus on sustainable growth strategies which include product diversification to penetrate into export markets and increase profitability.

MSM is committed to increase capacity utilisation of MSM Johor, which will reduce production cost and improve margins.

Its group CEO Datuk Anuar Aziz commented that domestic sales volume went down due to the limited operation hour and temporary closure of its client’s businesses during the movement control order (MCO).

He elaborated that the anticipated sales delivery during the festive season of Ramadan and Aidilfitri were also affected and the shift in sales composition in view of deteriorating domestic demand further strained the revenue.

Anuar stated that it has taken strategic approaches to remain competitive amid challenges, while making headway towards turnaround.

“The strategic adjustment in sales focus and price structure alleviates the market volatility to which currently, MSM is strategising to improve its quality of products and supply chain while strengthening sales margin,” he said in a statement today.

MSM revealed that higher industry and export sales volume offset the 37% decline in wholesale segment for the first half year of 2020.

“The challenge of optimising the expanded capacity and increasing the utilisation rate of MSM Johor, presented a new opportunity for MSM to further diversify its product and broaden export presence,” said the group CEO.

He pointed out that the development of value-added products for export through MSM Johor such as liquid sugar, premix and fine syrup has strengthened the group’s revenue.

“Positively, we managed to minimize the loss impact since the end of December 2019 underpinned by our relentless commitment to attain balance.”

For the first half of the financial year ended June 30, 2020, it reported a net loss of RM56.26 million, a 24.4% reduction from the RM74.39 million net loss posted in the corresponding period of the previous year.

Revenue for the half remained largely unchanged at RM959.58 million from RM959.84 reported previously.

source https://www.thesundaily.my/business/msm-net-loss-narrows-68-in-q2-from-higher-margins-lower-finance-cost-NY3551438