MSM Malaysia Holdings Bhd (MSM) will deploy more resources to penetrate new markets and market segments.
In its annual report for the financial year ended Dec, 2019 (FY19), MSM chairman Datuk Wira Azhar Abdul Hamid – who will retiring from his duties as the non-independent and non-executive chairman next month – said that if the sugar refiner’s traditional domestic market continues to present operating challenges, it must look at entering new products and developing new product segments.
He noted that the group is working on healthier sweetener products to be in line with consumer demand.
“That gives us a broader platform to enhance MSM’s business position. Some of these new products are expected to be launched in the second quarter of 2020,” he noted.
Azhar said that the group’s near-future growth opportunities are primarily linked to its Johor refinery’s capacity expansion for “value-added products”.
The group’s intention moving forward is to rationalise its group-wide production capacity through the consolidation of production of its Johor facility.
The MSM chairman added that as a recognised producer of an essential item, the impact of the Covid-19 pandemic on the company had been minimal. Trade, he explained, remains unaffected and that MSM has ample stock at hand to tide over any disruptions to the supply chain.
He also underscored that MSM’s first priorities are profitability and returning value to shareholders, an aim it is expects to achieve by optimising the now-expanded capacity of its facility in Johor.
The group suffered a loss of RM299.77 million for FY19, versus a net profit of RM35.66 million a year prior. Its revenue also shrank by 9.4% to RM2.01 billion, from RM2.21 billion for FY18, as a result of lower volumes sold and lower average selling prices.
Contributing to the loss were higher finance costs due to loan modification, and the provision of RM140.55 million for the impairment of its plant and machinery.
It is also worth noting that the group suffered losses for all four quarters of FY19.
Shares in MSM were 1.65% or a sen higher at 61.5 sen per share at the noon market close today, giving it a market capitalisation of RM432.33 million.