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Financial Highlights

Home / 2006 Annual Report: Managing Director/CEO’s Statement


For the financial year ended 31 December 2006, the Company recorded a revenue of RM362.2 million and a profit after tax of RM30 million. As compared to the previous year’s turnover of RM306.4 million and post-tax profit of RM23.3 million, the financial year under review achieved an increase of 18% in revenue and 29% in earnings respectively.

In tandem with the steady growth in revenue and earnings, the Company’s earnings per share also grew by 27% from 17.78 sen to 22.56 sen during the reviewed period.


In terms of operation, the year saw the completion of strategic implementation of cost-cutting measures, and the realisation of tangible benefits from these implementations as reflected in the financial year’s positive results.

Since 2005, we had invested in new technology to increase both cost-containment and improvement of productivity in the manufacturing of our steel products, so as to further enhance our operation’s competitiveness.

For our meltshop facilities in Bukit Raja, Klang, we had upgraded all existing machinery to adapt to natural gas usage. This strategic move has helped to reduce the cost of production by about 10% last year.

The 4th strand caster and other upgrades were also fully implemented in the Bukit Raja plant by second quarter of 2006, resulting in a reduction in production cost and increase in production capacity by 10 percent per annum respectively.


On the corporate front, the Company completed a Private Placement exercise of 13 million new shares on the Main Board of Bursa Malaysia Securities Berhad on 29 January 2007.


Going forward into 2007, the performance of the Company is expected to further improve, barring any unforeseen circumstances, with the government’s recent adjustment increasing the prices of steel bars and billets by 20%.

The Malaysian Iron & Steel Industry Federation (MISIF) forecast the local steel industry to grow by 10% in 2007, based on continuous recovery of construction sector. The overall outlook for 2007 is positive, as supported by the following factors:

1. Positive Economic Outlook

The Bank Negara Malaysia projected a continuous and steady GDP growth of 6% for the year 2007 with the construction, services and agriculture sectors being identified as three key sectors of growth.

2. Construction Industry Recovery

The construction sector is projected to turn around in 2007 to register a growth of 3%, against a contraction of 0.5% in 2006.

Under the Ninth Malaysia Plan, the Government has allocated up to RM10 billion for the development of Southern Corridor in the State of Johor, which includes the development of a special economic zone known as the Iskandar Development Region. The implementation of the plan, which will start in 2007, is expected to boost the local construction industry.

The steel industry is looking to benefit from the positive growth and re-bound of the construction industry.

3. Export Potentials

Singapore’s highly profiled casino/resorts mega-project development plan will also augur well for Malaysia’s steel industry due to our proximity to the island city.

4. Foreign Exchange

The strengthening of the Malaysian Ringgit against the US Dollar will reduce the cost of imported materials necessary for our manufacturing process, thereby benefiting our overall cost of production.


I would like to take this opportunity to thank all employees of the Company for their commitment, dedication and contribution in continuing to improve the Company’s performance. On behalf of all members of the Company, I also want to thank our customers, business associates and shareholders for their valued support and continuing confidence in the Company and its management team.


Managing Director/Chief Executive Officer

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