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Home / 2009 Annual Report: Managing Director/CEO’s Statement


For the Financial year ended 31 December 2009, the Group recorded a turnover of RM687.3 million with a marginal loss before tax of RM8.5million.

The weaker financial performance was attributed to the poor demand and low margin of steel products during the 1st half of 2009 in which the effects of the global financial crisis had reached its crescendo. During the 2nd half of 2009, Masteel’s customers returned to the market and eagerly bought up stock piles of steel products to replenish their depleted inventories due to abating market uncertainty and liquidity paralyses. This was reflected in the company’s return to profitability during the 2nd half of 2009.

The Group had also made significant progress in the export of its steel products to all major cities of Australia and the new export markets had contributed positively towards the bottom line of the Group in the second half of 2009.


In view of the positive Gross Domestic Product (GDP) growth for most Asian Countries, which is led by China and further reinforced by the recovery in the US and Brazil, the demand for steel products is expected to increase by 25% as compared to 2009. Prices of steel products have continued to rise underscored by the 100% increase of iron ore prices effective from April 2010.

With the commissioning of the new slit rolling equipment from Italy in the Petaling Jaya rolling mill, Masteel is expected to improve its margin by producing smaller diameter steel bars which sell at a price premium over conventional steel bars.

The timely installation of this equipment will help enhance Masteel’s steel bar market shares domestically and abroad.

With the overall strengthening of demand and prices of steel bars and billets, Masteel is expected to be able to price in any rise of raw material costs to its products without impeding its targeted sale volumes for the year.


The earlier approval received for the private placement has lapsed and no placement had taken place during the year due to weak market sentiments. The management has decided to time its next placement when the market improves its valuation of the company’s stocks to better reflect the underlying value of its business.


We recognize the importance of the implementation of comprehensive Corporate Social Responsibility (CSR) policies on our business operations and will continue to incorporate the appropriate CSR framework in our tactical business plans especially in the areas of conservation of environment and enhancing the positive impact of our business activities on the community.


On behalf of the Board, I would like to thank all our valuable clients, shareholders, bankers, suppliers and relevant government authorities for their continuous support to our Group.


Managing Director/Chief Executive Officer

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