KUALA LUMPUR: Malayan Flour Mills Bhd's net profit declined 48.8 per cent to RM10.4 million in the first quarter (Q1) ended March 31, 2023 from RM20.3 million of the same quarter last year.
However, the company's revenue rose 30.2 per cent to RM826.7 million during the quarter.
This was attributed largely to both higher sales volume and selling prices in the flour and grains trading (FGT) segment.
In spite of the increase in selling prices, Malayan Flour said Q1 2023 profit margins for the FGT segment were adversely affected by its operations in Malaysia and Vietnam facing challenges of rising costs of raw materials and stronger US dollar.
Malayan Flour executive deputy chairman and managing director Teh Wee Chye said amid the challenging environment for FGT business, the company would remain focused on ensuring cost efficiency in its flour milling operations through better flour extraction and blending processes.
At the same time, Teh said Malayan Flour would ensure uninterrupted supply of its raw materials by diversifying the sources, as well as pricing its end-products to meet the markets' needs.
"We are confident in the prospects of the poultry integration (PI) segment, as this division improved its operational indicators, from upstream and primary processing plant operations to sales channels for our poultry products," he said.
Crucially, Teh said the PI segment continued its momentum of volume optimisation in line with rising demand for processed meat by its clients in quick-service-restaurants and food manufacturing sectors.
"Against that backdrop, we aim to continue investing in our PI segment together with our joint venture partner to upgrade the capacities of our poultry processing plants. We remain optimistic of the company's outlook for 2023 and beyond," he added.
DTSB, under which the PI segment operates, intends to invest at least RM135 million in capital expenditure (capex) in FY2023 to upgrade its primary poultry processing plant in Sitiawan, Malaysia.
The capex includes increasing the slaughtering capacity of the processing plant by more than 20 per cent to 340,000 birds per day, from 280,000 birds per day currently