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Home / 2006 Annual Report: Chairman’s Statement

On behalf of the Board, I am pleased to present the Annual Report and Financial Statements of Malaysia Steel Works (KL) Bhd (“Masteel”) for the year ended 31 December 2006.


According to the Bank Negara Malaysia economic performance report, Malaysia’s economy strengthened in 2006 with a 5.9% expansion in real gross domestic product (GDP). Both the services and manufacturing sectors continued to be the main drivers of growth. The construction sector saw a gradual recovery registering a positive growth by the final quarter of the year.

Domestic demand for steel in 2006 grew in tandem to the moderate growth in manufacturing and construction sectors. Overall, steel was traded at higher prices in the year due to increase in global steel prices.

The Southeast Asia region saw a significant reduction in supply of steel from China as a result of the country’s tightening controls on steel exports. This drove ASEAN member countries to source steel supplies within the region.


For the financial year ended 31 December 2006, Masteel reported a 18% year-on-year increase in revenue to RM362.2 million and an 29% year-on-year increase in profit after tax to RM30 million.

The healthy growth in both revenue and earnings was contributed by a combination of factors, namely the increase in domestic and regional demand of steel, higher selling prices, and onset of cost savings from production during the period.


In respect of the positive financial results, the Board is pleased to recommend a first and final dividend of 2.1 sen per share less 27% taxation totaling RM2,238,180.00 for the financial year ended 31 December 2006.

This proposed dividend is subject to the approval of shareholders at the Company’s forthcoming Annual General Meeting.


The surge of global steel consumption and steel prices are expected to lead the industry into a more interesting business environment in 2007.

Singapore’s casino/resorts mega-projects projects are expected to boost steel demand in the Southeast Asia region.

On the local front, we are optimistic that the Ninth Malaysia Plan outlining the Malaysian Government’s efforts to boost the construction industry will further improve domestic demand of steel in 2007, barring any unforeseen circumstances. We are also optimistic that the Company will benefit from the Government’s investment in the Iskandar Development Region in the State of Johor.

All the above mentioned prospects will augur well for the steel industry, which will see an increase in as well as stable demand of construction-based steel products in the next few years.


On behalf of the Board of Directors, I wish to express our sincere gratitude and appreciation for the support of our valued customers, business associates, bankers, government authorities and shareholders, and we look forward to your continued support in the future.

To all our management and staff, we thank you for your untiring efforts in helping the Company achieve its good performance for the financial year under review. My sincere thanks and appreciation also goes out to the Board members for their counsel and guidance during the past year.



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