By Ying Xian Wong
MSM Malaysia Holdings shares fell after the company posted a wider net loss in the second quarter.
Shares of the refined sugar producer fell as much as 10.8% early Friday and were recently 10.1% lower at 1.33 ringgit, bringing its year-to-date losses to over 17%.
MSM Malaysia late Thursday said its second-quarter net loss widened to MYR32.4 million ($7.4 million) compared with a loss of MYR20.8 million in the same period a year earlier, mainly weighed by higher operating costs.
Revenue was 12% higher on year, on higher overall average selling prices, coupled with government incentives for certain packed sugar sold in the domestic market.
The sugar industry has been facing rising input costs on higher global freight and natural gas prices, along with volatile raw sugar prices, MSM chief executive Syed Feizal Syed Mohammad said.
Despite these challenges, MSM is focused on boosting domestic sales and expanding its export efforts to 20 countries, he said.
MIDF Research downgraded MSM's rating to neutral from buy, and cut its target price to MYR1.39 from MYR3.60, citing headwinds.
While the company's turnaround efforts may persist, achieving a comfortable profit margin of 6%-9% in near term appears unlikely due to the ongoing price war among industry players, forex volatility, continued El Niño impact on sugar production in key producers like Brazil, Thailand and India, and surging natural gas prices, MIDF said.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
August 22, 2024 22:04 ET (02:04 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments