KUALA LUMPUR: Malayan Flour Mills Bhd (MFM) net profit dropped 16.6 per cent to RM145.05 million in the financial year ended December 31, 2022 (FY22) compared to RM173.91 million the previous year.
The company said that in FY22, a write-back on remeasurement of contingent receivables of RM8.8 million was recognised compared to the previous year, whereby RM77.9 million was fair value loss, and profit guarantee payment was paid off the payment of RM15 million was recorded.
Revenue increased 20 per cent to RM2.92 billion in FY22 versus RM2.43 billion in FY21, attributable mainly to higher flour and gain trading (FGT) business sales.
For the fourth quarter (Q4), the company's net profit leapt 95.1 per cent to RM46.87 million compared to RM24.03 million in the corresponding quarter of the previous year, backed by higher revenue.
Revenue for the quarter rose 18 per cent to RM819.56 million versus RM694.69 million in Q4 2021 due to the continued improving operations of the company's poultry integration (PI) segment, operated by the joint venture (JV) company with Tyson Foods.
In addition, there was a write-back on the remeasurement of contingent receivables amounting to RM8.8 million recognised during the quarter.
The PI segment nearly tripled its profit after tax to RM94.6 million in Q4 2022 versus RM32.3 million in Q4 2021.
Correspondingly, the share of profit from MFM's 51 per cent equity stake in the joint venture (JV) amounted to RM48.2 million for the quarter under review.
The stellar performance of the JV company was attributable to multiple factors, amongst which included continued market penetration into the QSR chains, improved margins from economies of scale due to increased plant utilisation, better sales mix with increased average selling prices, and a higher deferred tax asset recognised arising from tax incentives.
The segment saw a 13.9 per cent increase in revenue to RM302.7 million, versus RM265.8 million in the same quarter last year.
"The financial performance for this quarter, while below our expectation for the FGT segment, shows the resilience of our business model of providing staple foods of flour and processed chicken.
"Despite the volatility of our raw materials prices and rising interest rates, our Q4 2022 numbers indicate our ability to contain overall business risks for the group.
"Prospects remain bright as the poultry integration segment continues its momentum of volume optimisation in line with the rising demand for our processed meat by our clients in QSR and food manufacturing sectors," he said.
MFM declared a second interim dividend of 1.5 sen per share in respect of FY22.
Together with the interim dividend of 1.5 sen per share paid on September 23, 2022, total dividends in respect of FY22 amount to three sen per share, or RM30.6 million, equivalent to a payout ratio of 20 per cent.
The second interim dividend will be paid on March 24.
