MAG Holdings Bhd (formerly XingHe Holdings Bhd) is a step closer to be among the top three players in Malaysia’s aquaculture industry.
By taking advantage of the re-opening of Malaysia’s economy and international borders to accelerate its growth, the group will focus on its aquaculture and food processing business as key growth driver, according to its executive chairman Stephen Ng Min Lin.
MAG (acronym for Malaysian Aquaculture Group) posted its second consecutive net profit of RM17.5 mil on the back of a revenue of RM135.4 mil for its financial year ended June 30, 2022 (FY6/2022) amid strong demand for its aquaculture and food processing business.
However, the group slipped into a net loss of RM2.4 mil in its 4Q FY6/2022 despite recording revenue of RM60.5 mil. The losses were attributed to unrealised foreign exchange (FX) losses of RM6.8 mil during the quarter. Excluding the unrealised FX loss, MAG would have a recorded a profit of RM4.4 mil during the quarter under review.
“We are excited to continue with the turnaround story that has helped us turn profitable since FY2021,” commented Ng.
“Aside from the strong financial performance in FY2022, the group has also improved its cash flow position as reflected by the improvement in its net cash generated from operating activities to RM44.9 mil in FY2022.”
According to Ng, MAG has taken proactive measures to create a lean, agile and efficient operation within the group. This is reflected by the group’s net profit margin improvement to 12.9% in FY2022 from 11.3% in FY2021.
“The combined strength of our three farms which are Wakuba Farm, Umas-Umas Farm and Apas Parit Farm will create economies of scale and synergy from cultivation to production of the finished products,” envisages Ng.
“By taking advantage of our farms’ economies of scale and synergy, we expect to gain cost efficiency and higher production volumes and contribute meaningfully to the group’s financial performance moving forward.”
According to MAG’s website, the Wakuba Farm is a prawn farm with 102 cultivation ponds within a land area of 97.9 hectares in Kg Wakuba, Tawau (Sabah) while the Umas-Umas Farm (also located in Tawau) specialises in prawn aquaculture farming with 133 cultivation ponds and a prawn processing plant within a land area of 120.5ha.
Both farms are situated along the coastal area in the Western Pacific Ocean which is well known for its pristine waters ideal for producing outstanding quality shrimps. The group cultures mainly vannamei shrimps in a non-pesticidal cured marine ponds as its fresh shrimp product.
At the close of today’s trading, MAG was up 0.5% or 2.78% to 18.5 sen with 3.59 million shares traded, thus valuing the company at RM267 mil. – Sept 1, 2022
