Earnings of agri-business services provider Mewah International soared by some 643.1% to US$86.5 million ($115.3 million) in FY2020 ended December, from US$11.6 million in the year before.
On a fully diluted basis, this translates to earnings per share of 5.77 US cents in FY2020, versus 0.78 US cents in FY2019.
This comes as the group had achieved what it calls a “record” sales volume of 4.82 million metric tonnes, which is up 5.8% from FY2019. This in turn pushed revenue up by 22.3% to US$3.4 billion in FY2020, from US$2.8 billion in the year before.
Mewah International adds that a 15.8% y-o-y increase in its average selling prices had also contributed to its higher revenue.
With contributions of US$2.6 million, the bulk services segment accounted for 76.8% of total revenue. This is up 32.9% from the previous year and is thanks to a 10.7% increase in its sales volume and 20.1% higher average selling prices.
The remaining 23.2% of income or US$798.5 million came from its consumer pack segment. This is down 3.3% from FY2019 and follows a 10.4% dip in its sales volume. A further decline was mitigated by a 7.9% increase in its average selling prices.
SEE:Mewah International's 1H earnings surge to US$27.8 mil on higher margins
Other sources of revenue amounting to US$5.8 million came from interest collections (US$1.2 million) and insurance claims (US$2.9 million).
In terms of geography, the highest revenue, or 36%, came from Africa; 13% came from Malaysia/Singapore, 13% was from Middle East and 19% was from the Rest of Asia.
The group also had revenue from Europe (8%), Americas (5%) and Pacific Oceania (5%).
In this time, the cost of sales – which mainly consists of the cost of inventories – was up by 17.9% to US$3.2 billion.
As such, the group’s gross profit was up 118.5% to US$270.7 million in FY2020.
Meanwhile, its sales and distribution expenses was up by 5% on year to US$40.8 million, while that for administrative services was US$81.7 million, comparable to the year before.
Finance expenses conversely was down 41.6% to US$8.8 million.
Its operating margin – which measures revenue after covering operating and non-operating expenses – more than doubled to US$240.5 million.
The group attributes this to the higher sales volume and the increase in operating margin per metric tonnes to US$49.9 in FY2020 versus US$23.1 in the year before.
Excluding exceptional losses of US$27.0 million due to impairment losses on property, plant and equipment and legal claims, Mewah International's earnings would have been up some 9-fold to US$113.6 million in FY2020, compared to US$11.6 million in FY2019.
The group says it is pleased with its performance and notes that its operations were not significantly impacted by the safe management measures imposed since it is considered an essential service.
However, it adds that the prices for most agri-commodities remained volatile throughout the year with the average MPOB (Malaysian Palm Oil Board) spot price for CPO (crude palm oil) being RM2,784/tonne ($914.9/tonne) in FY2020, compared to RM2,145/tonne in FY2019.
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The increase follows weaker than expected CPO production and stronger demand especially from China and India after the end of economic restriction periods.
“Many countries were trying to stock up and guarantee sufficient internal availability of various agri commodities. This strong demand and tight supply conditions resulted in robust refining margins,” Mewah International says in its results announcement.
Going forward, the group says it will explore opportunities to increase its value-chain participation as well as to diversify its manufacturing facilities.
With cash and cash equivalents of US$78.2 million in FY2020, up from US$61.8 million in the year before, it appears to be in good stead to see its ambitions through.
Mewah International has also declared a final dividend of 0.6 cents per share, to be paid out on May 18. Including the 0.15 cent interim dividend paid out, its total dividend for FY2020 is 0.75 cents.
Comparatively, the group had paid out 0.46 cents in dividends in FY2019.
Shares in Mewah International closed flat at 34.5 cents on Feb 26, prior to its results announcement.