Malayan Flour Mills Berhad Q3 2024 Earnings: Revenue Up 3.1%, EPS Down 75%

Malayan Flour Mills Berhad reported a 70% decrease in net income to RM7.34m in Q3 2024, with EPS falling to RM0.006 from RM0.024 in Q3 2023. Revenue increased 3.1% to RM799.2m. The company's profit margin dropped to 0.9% from 3.1% in Q3 2023.

Malayan Flour Mills Berhad (MFM), a prominent player in Malaysia's flour and grain trading industry, reported a significant decline in net income for the third quarter ended September 30, 2024 (Q3 2024). The company's net profit dropped by nearly 70% year-on-year (y-o-y) to RM7.34 million, primarily due to a substantial loss from joint ventures [1].

Despite the decline in net income, MFM's overall revenue grew by 3.1% y-o-y to RM799.2 million, driven by higher sales from the flour and grain trading business [1]. However, the company's profit margin dropped significantly, falling from 3.1% in Q3 2023 to a mere 0.9% in Q3 2024 [1].

A closer look at MFM's financial performance reveals that the company's revenue and cost of revenue have been on a rollercoaster ride over the past few years. In 2021, the company reported revenue of RM2.682 billion, which declined to RM2.119 billion in 2022 and further to RM2.427 billion in 2023 [2]. Similarly, the cost of revenue fluctuated between RM1,905 million and RM2,807 million during the same period [2].

The decline in profit margin in Q3 2024 can be attributed to several factors, including increased selling, general, and administrative expenses, higher other operating expenses, and a significant increase in interest expense [2]. In contrast, the company's gross profit and operating income have remained relatively stable, with only minor fluctuations over the past few years [2].

Despite the challenges faced in Q3 2024, MFM's financial performance for the nine-month period ended September 30, 2024, shows signs of improvement. The company's net profit jumped by 96% y-o-y to RM64.1 million, driven by reduced interest expenses and improved contribution margin [1]. However, revenue for the same period fell by 2.2% y-o-y to RM2.3 billion [2].

In conclusion, Malayan Flour Mills Berhad reported a significant decline in net income for Q3 2024, primarily due to a substantial loss from joint ventures. Despite the decline in net income, the company's revenue grew, and its financial performance for the nine-month period showed signs of improvement.

References:
[1] The Star. (2024, November 20). Malayan Flour 3Q net profit declines 70%. Retrieved November 21, 2024, from https://www.thestar.com.my/business/business-news/2024/11/20/malayan-flour-3q-net-profit-declines-70
[2] Stock Analysis. (n.d.). Malayan Flour Mills Berhad (KLSE: MFLOUR). Retrieved November 21, 2024, from https://stockanalysis.com/quote/klse/MFLOUR/financials/