MSM Malaysia Swings to RM23 Million Quarterly Profit Despite Revenue Slump — BigGo Finance

MSM Malaysia Holdings Bhd (MSM:MK), the producer of the country’s leading refined sugar brand “Gula Prai,” returned to profitability in the second quarter ended June 30, 2026, as tighter cost controls and a shift toward higher-margin products offset a sharp decline in revenue.

The sugar refiner posted a net profit of RM23.43 million for the April-to-June period, reversing a net loss of RM29.74 million recorded a year earlier. The turnaround came even as revenue fell 25.2 percent to RM607.78 million from RM812.75 million, dragged down by lower average selling prices and weaker sales volume.

Group chief executive officer Aini Shahar attributed the improved bottom line to disciplined execution across the business. “We have prioritised higher-margin sales, aligned production with demand and maintained tight cost discipline,” she said in a statement. “Our immediate focus is to preserve margins and sustain profitability.”

The company said a more favorable sales mix, focused on higher-margin products, led to a year-on-year improvement in gross profit margin while mitigating the impact of lower average selling prices. Lower raw sugar prices, favorable foreign-exchange movements and reduced freight costs also contributed to the quarterly performance.

For the first half of financial year 2026, MSM recorded a net profit of RM4.58 million, compared with a net loss of RM26.02 million in the same period a year earlier. First-half revenue declined 25.7 percent to RM1.16 billion from RM1.56 billion.

Despite the return to profitability, Aini acknowledged that revenue and capacity utilization remained below the levels seen a year ago amid a persistently challenging operating environment. The group’s utilization factor stood at 39 percent in the first half of 2026, down from 48 percent in the corresponding period of 2025.

Looking ahead, MSM expects the domestic sugar industry to remain difficult for the remainder of 2026, citing continued cost pressures and competition from imported sugar as factors weighing on margins. The company said it is engaging with the government to finalize a sustainable pricing framework aimed at safeguarding national food security and supporting the long-term viability of the domestic sugar industry.

“Maintaining profitability will depend on continued discipline and our ability to respond to market and cost pressures,” Aini said, adding that the group will continue to prioritize higher-margin products in the domestic market while optimizing its product mix and sales strategy.

MSM’s return to the black marks a notable shift for the refiner, which has grappled with elevated input costs, fluctuating raw sugar prices and competitive pressures in recent quarters. The company’s measured approach to cost management and its focus on margin protection appear to be yielding results, even as top-line growth remains under pressure.

The sugar producer’s shares have reflected investor caution in recent months, with the broader consumer staples sector facing headwinds from soft demand and rising operating costs. MSM’s ability to sustain profitability in the second half of the year will likely hinge on raw material price trends, currency movements and the outcome of its discussions with the government on pricing policy.