PETALING JAYA: Malaysia Steel Works Bhd (Masteel) sees a 56.5% decline in earnings to RM7.04mil for its financial year 2012 third quarter results due to rising production costs and weaker selling prices.
Masteel recorded a net profit of RM16.2mil in the corresponding period a year ago.
The integrated steel manufacturer achieved better revenue, however, at RM312.9mil or 4.2% higher than RM300.3mil in the third quarter last year.
Managing director and chief executive officer Datuk Seri Tai Hean Leng said the company was pleased with what it was able to achieve despite the challenges.
“The group has been able to benefit strongly thanks to our strategic location within the Klang Valley to meet the demand for high tensile steel bars from private, public and private-public works that are currently being undertaken,” he said in a statement.
Tai added that with more Economic Transformation Programme projects in the pipeline and the seasonal upswing trend expected from the export markets, “we are optimistic that we will end the year on a positive note”.
For its nine-month period, Masteel posted a 44.2% drop in earnings to RM21.2mil from RM37.9mil. Its revenue was 8.8% higher from RM916.7mil a year ago to RM997mil.
Tai said 85.3% of the third quarter sales of steel billets and bars were to local customers.
“While this increase in local demand is welcomed, we know we cannot depend entirely on the domestic market, especially when our increased capacity comes on-stream.”
Going forward, Masteel will continue to actively grow its export orders, both in markets it already has a foothold and new markets.
Masteel currently operates a 350,000-tonnes-per-annum rolling mill in Petaling Jaya and a 550,000 tonne per annum steel billet melt shop in Bukit Raja.
The group is building a second rolling mill in Bukit Raja that, once completed at the end of 2013 or early 2014, will increase Masteel’s high-tensile steel bars production by 180,000 tonnes per annum.
Masteel has also landed orders to supply steel bars for the Klang Valley Mass Rapid Transit rail project recently.