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 &ldquo record&rdquo 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.

 

As such, the group&rsquo 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 &ndash which measures revenue after covering operating and non-operating expenses &ndash 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. 

 

The increase follows weaker than expected CPO production and stronger demand especially from China and India after the end of economic restriction periods.

&ldquo 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,&rdquo 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.