Mewah International (MV4) H1 2023 earnings summary

Executive summary

• H1 sales volume rose 11.0% to 2.124m MT; revenue fell 21.0% to US$2,135.8m as lower selling prices outweighed volume growth.

• Net profit attributable to equity holders declined 28.4% to US$10.2m, despite a 16.6% increase in operating margin to US$89.1m.

Financial highlights

• Average selling prices fell 28.8% to US$1,005.6 per MT; operating margin per MT rose 5.0% to US$41.9.

• Gross profit increased 3.6% to US$128.7m as cost of sales fell 22.2% to US$2.007bn; adjusted EBITDA rose to US$40.5m from US$34.7m.

• Profit before tax fell 17.5% to US$12.0m; finance expenses rose 124.8% to US$14.3m and administrative expenses increased 15.0% to US$56.0m.

• Foreign-exchange losses narrowed 20.2% to US$25.2m; reversal of expected credit losses was US$0.8m versus US$2.1m in H1 2022.

Outlook and guidance

• Global slowdown, persistent inflation, geopolitical tensions and monetary tightening remain headwinds; strong El Niño could reduce Indonesian and Malaysian palm yields and tighten inventories.

• Indonesia’s B35 biodiesel mandate and domestic market obligations, alongside established brands, integrated Malaysian facilities and growing Indonesian presence, frame operating conditions and strategic positioning.