KUCHING: Malaysia Steel Works (KL) Bhd (Masteel) has bucked industry trends by posting net profit of RM2.73 million for its fourth quarter ended December 31, 2012 (4Q12), ending its financial year (FY12) positively with RM23.9 million net profit.
By comparison, Masteel recorded net loss of RM13.3 million in 4Q11 and FY11 net profit of RM24.35 million. The positive performance was achieved on the back of improved operations efficiency as well as lower costs.
According to its press release yesterday, 4Q12 and FY12 revenue stood at RM315.21 million and RM1.31 billion respectively. By comparison, it recorded 4Q11 and FY11 revenue of RM336.66 million and RM1.25 billion respectively.
“Our strategic location within the Klang Valley has allowed us to play a key supportive role in nation-building initiatives rolled out last year,” Masteel managing director and chief executive officer Datuk Sri Tai Hean Leng said in a statement.
“We also continued to benefit from ongoing strategies to improve efficiencies at our two plants in Selangor,” he added.
“With the accelerated implementation of more Economic Transformation Programme (ETP) projects in 2013, the steel products that Masteel produces are expected to remain in high demand. As such, we are confident of a strong showing this year, barring unforeseen circumstances,” he further pointed out.
Masteel’s results stood out amongst its peers, as the industry faced challenges from lower selling prices and overcapacity in 2012.
However, industry analysts opined that the continuous awarding of major rail, civil works, buildings and power plant projects would underpin medium term demand for the local steel sector going forward, the sector was due for a turnaround.
In light of this, Tai said Masteel’s plans in place to grow capacity would also allow the group to leverage on the expected demand from the domestic market.
“We have already delivered our products to many public sector and private-public projects under the ETP initiative and established a strong track record thus far.”
“As we speak, our steel billet plant is being upgraded to 600,000 metric tonnes (MT) per annum capacity. We are also building a new mill, which will increase our steel bar production capacity to 550,000 MT.”
“Our increased capacity coming on-stream in 2013/14 will effectively enable Masteel to take advantage of the opportunities in the local market,” he concluded.