Malayan Flour Mills Bhd (MFM) is positioned to maintain robust earnings prospects supported by steady growth in wheat flour demand, despite challenges posed by rising wheat prices linked to the ongoing conflict between Russia and Ukraine. The geopolitical tensions have disrupted grain export flows, exerting upward pressure on commodity costs.

According to analysis from Hong Leong Investment Bank (HLIB) Research, although MFM’s flour milling business margins could be squeezed by higher wheat prices, this effect may be partially offset by sustained demand growth for wheat flour. The product remains relatively affordable compared to rice, and regional structural growth trends are expected to continue supporting volume increases.

MFM’s financial results for the first half of 2026 reflect this dynamic, with core earnings rising 28.1% year-on-year to RM84.7 million. This improvement was driven by stronger contributions from both the flour milling and poultry integration segments. Flour sales volumes expanded across all key markets during the period.

The poultry integration business recorded a 6% increase in sales volumes in the first half of 2026. This growth was attributed to resilient retail demand, which more than compensated for weaker sales in the food services channel.

HLIB also cited ongoing capacity enhancements as important drivers of MFM’s longer-term growth outlook. The company’s Vietnamese subsidiary, Vimaflour, is undergoing an expansion project with a planned capital expenditure of around US$20 million (approximately RM80.09 million). Expected to be completed by the end of 2027, the upgrade aims to increase production capacity by 20%, reaching 2,500 tonnes per day.

In addition to capacity growth, potential downstream ventures present further opportunities to diversify revenue streams and strengthen the group’s market position. These strategic initiatives, combined with stable demand fundamentals, suggest MFM’s earnings outlook remains resilient amid the current global supply challenges.