KUALA LUMPUR (Aug 20): Malayan Cement Bhd (KL:MCEMENT) lifted dividend payout as the building materials firm reported new record annual earnings from higher sales and lower costs.
However, the largest cement producer in Malaysia by capacity flagged in an exchange filing that higher costs of energy, construction materials, and freight could potentially slow down construction activities and in turn affect demand for its products.
“Volatility in fuel and freight costs also remains a key risk to cement production costs,” Malayan Cement cautioned.
Prices of coal have soared amid a scramble to secure supply for power plants and other heavy industries as geopolitical conflict in the Middle East disrupted the global flow of oil and gas.
Coal, used to fire up Malayan Cement’s kilns to convert raw materials into clinker, the foundational ingredient for cement, makes up 20%-30% of its production costs. Diesel, meanwhile, makes up about 1%-2% of its direct cost.
Net profit for the three months ended June 30, 2026 (4QFY2026) was RM222.92 million, a 35% increase from the same quarter a year earlier, outpacing a 17% year-on-year growth in revenue to RM1.29 billion.
The growth reflects “disciplined cost management and improvements in operational efficiency”, including rising adoption of renewable energy and waste heat recovery as well as lower operating and finance costs, Malayan Cement said in a statement.
“These measures helped mitigate the impact of higher transportation and fuel costs,” the company noted.
For the full financial year, net profit rose 34% to RM903.17 million. Revenue climbed 10% from a year earlier to RM4.99 billion thanks to higher sales of ready-mixed concrete and drymix, particularly from projects requiring high-grade and specialised products.
A second interim dividend per share of nine sen was also declared and payable on Oct 2, lifting the total for the financial year to 15 sen from 12 sen in FY2025.