KUALA LUMPUR: Staple foods producer Malayan Flour Mills Bhd dipped into a net loss of RM6.68 million for the year ended Dec 31, 2023 versus RM145.04 million net profit previously, after accounting for a fair value loss on its contingent receivable.
Revenue, however, rose to RM3.15 billion in the same period as compared to RM2.92 billion registered a year earlier.
For the fourth quarter ended Dec 31,2023 (4Q23), the company recorded revenue of RM794.6 million, a marginal decrease of 3.1 per cent against to RM819.6 million recorded in the preceding year.
"This was mainly attributed to lower sales recorded in the flour and grain trading segment," Malayan Flour said in a filing with Bursa Malaysia.
Excluding the fair value loss of RM71.1 million, Malayan Flour's 4Q23 pre-tax profit from operations, principally from its flour and grain trading segment (FGT), came in higher at RM58.5 million, compared to a profit of RM2.9 million previously, helped by lower raw material costs of wheat and grains.
Despite higher sales volume, the lower topline in 4Q23 was mainly due to the lower average selling prices, in line with the retreating prices of wheat and grains after more than a year of turbulence caused by war, weather, and escalating energy costs, it said in a statement today.
During the quarter, due to prevailing difficulties of the poultry integration business in meeting the financial targets of the joint venture, Malayan Flour wrote off the consideration receivable of RM71.1 million from its joint venture partner.
Malayan Flour executive deputy chairman and managing director Teh Wee Chye said the company is encouraged by the continued improvement in its FGT operations in Malaysia and Vietnam.
"Seeing the lower raw material costs have helped ease some of the pressure faced during the year as we struck a balance between maintaining our profitability and at the same time fulfilling our social responsibility to meet the demand of the consumers in these countries we operate.
Malayan Flour will continue to monitor the impact of commodity prices arising from the global supply and demand dynamics and adjust selling prices accordingly to diversify the sources of wheat, corn and soybean meal.