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Home / 2004 Annual Report: Managing Director/CEO’s Statement


For the financial year under review the Company recorded a turnover of RM280.8 million and a pre-tax profit of RM35.9 million. Compared to Year 2003’s turnover of RM242.4 million and Profit Before Tax (PBT) of RM19.6 million, the Financial Year 2004 represented an increase of 15.8% on turnover and 83% increase in PBT, of which a write-back of electricity in arrears accrual in previous years amounting to RM11.8 million was included. This resulted in a 23% increase in profit margin as compared to Year 2003.

In addition, the Company has out-performed its profit projection stated in its initial public offerings (IPO) prospectus. Compared to the forecast turnover of RM230.3 million, we achieved an actual turnover of RM280.8 million, exceeding the projection by a marked 22%. As for the Profit After Tax (PAT) of RM24.1 million (net of TNB write-back for electricity arrears), it exceeded the forecast PAT of 22.4 million by a good 8%.


In terms of plant capacity, we saw an improved utilisation for steel billets from 58% in Year 2003 to 62% in Year 2004. This had resulted in greater economy of scale for billets production. For steel bars we maintained the same utilisation rate at 67% for both years.

The average steel selling pices increased from RM1,214 per metric tonne (MT) to RM1,570/MT, representing an overall increase of 29%. Likewise, the average selling price for steel billets had also increased from RM875/MT to RM1,294/MT or 48% increase as approved by the Government since April 2004.

MSW has also successfully produced its first batch of Grade 12K premium billets for the production of highgrade wire rods for a reputable client in Sarawak.


On 7th February 2005, the Company was listed on the Main Board of the Bursa Malaysia Securities Berhad. The IPO was oversubscribed 38 times from the original target of RM30.3 million.


The first quarter of Year 2005’s performance is expected to be slow due to the festive season and the repatriation of foreign workers in the construction industry. However, looking forward, the Company anticipates a much better outlook for the second, third and fourth quarters, supported by the following factors:-

1.Construction Industry Boost

The Government recently announced its decision to bring forward 26 projects under the 9th Malaysian Plan for immediate implementation. These projects worth RM2.4 billion will strongly boost the local construction industry, and will increase the domestic demand for steel.

2. Positive Economic Outlook

The Bank Negara Malaysia projected a GDP growth of 5% to 6% for the Year 2005. This will be driven mainly by private sector consumption and investments.

3. New Export Markets

On the export side, MSW aims to export its steel products to new markets, such as Thailand and Indonesia.

4. Anticipation of Higher Steel Prices

Recent high demand for steel in China has resulted in significant price hikes in iron ore by as much as 71.5% and in coal by 100%! The Chinese government has also removed the 13% tax rebate for steel exporters in China thereby increasing the price of billets. This would translate to higher steel prices, which is to be anticipated.

With the possibility of a further increase in steel prices, the Board is cautiously optimistic of the Company’s performance in Year 2005.


On behalf of the Board, I wish to express our deepest appreciation to our shareholders, customers and associates for the continuous trust and support for the Company. On the same note, the Board and I would like to extend our thanks and gratitude to our management and staff for their dedication and commitment.


Managing Director/Chief Executive Officer

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