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Dear Shareholders,

The year in review had seen Masteel navigate a challenging period of declining steel prices, on the back of oversupply in major steel producing countries in Asia.

Domestically, while continued robustness in the construction sector fuelled stronger demand for steel bars, the steel industry grappled with rampant cheap imports which were often not accredited by SIRIM. Based on statistics from Malaysia’s Ministry of International Trade and Industry (MITI), average domestic prices of steel bars weakened more than 30% from the RM1,950–RM2,100 range in early-2015, to RM1,450–RM1,550 in end-2015.

Furthermore, the drastic weakening of the MYR versus major foreign currencies posed additional cost challenges, as the domestic steel industry relies substantially on imported raw materials such as highgrade scrap metal and other products.

That said, the Group had successfully maintained its market share and recorded commendable sales amidst the challenging environment. We completed our expansion plan comprising a new rolling mill, as well as implemented various operational improvements. We are confident that these efforts would benefit us in the long term and provide us with the momentum for sustainable business growth.

On behalf of the Board of Directors of Masteel, I present to you the Annual Report and audited financial statements of the Group for the financial year ended 31 December 2015 (FY2015).


In spite of the extremely tough external environment, Masteel had successfully delivered revenue beyond the billion Ringgit mark in FY2015, noting RM1.1 billion in sales from RM1.5 billion a year ago on the account of lower sales prices.

Meanwhile, the Group recorded foreign exchange losses due to the significant weakening of the MYR versus various foreign currencies. These factors contributed towards the Group’s loss before tax and net loss of RM46.4 million and RM50.4 million respectively in FY2015. Comparatively, the Group recorded RM28.1 million and RM15.8 million in profit before tax and net profit a year ago.

The Group posted net loss per share of 20.81 sen in FY2015, from earnings per share of 6.99 sen previously.

Masteel’s shareholder’s equity stood at RM529.9 million at end-FY2015 versus RM576.8 million previously mainly due to lower retained profit. Meanwhile, the Group’s borrowings increased to RM352.8 million compared to RM313.3 million previously due to funding for our rolling mill expansion.

Net gearing increased to 0.66 time versus 0.54 time previously, yet still significantly below the benchmark of 1.0 time. The Group remains well poised to service our debt obligations and are aggressively taking steps towards sustainably paring down our borrowings.


Masteel recognizes the importance of being a steward to the well-being of communities around us, and strives to bring tangible improvements to their lives through our CSR initiatives.

On 18 March 2016, the Group organized an annual charity event to assist the needy. We reached out to two orphan shelters, namely Shelter Home 1 and Rumah Amal Cahaya Tengku Ampuan Rahimah (RACTAR).

The Group focused on the themes of enhancing the learning environment and facilities of the children, as well as providing better internet access to hone their information technology savviness. The Group donated a total of 13 computers to both shelters, and organised a host of motivational and team building activities.

We regard these activities as our investments into the lives of the future generations.


As one of the leading steel players in the industry, we strive to meet the expectations of all stakeholders of the Group, including the community at large. We believe in establishing greater accountability towards our stakeholders, in line with best practises towards achieving sustainable and long term business growth.

The measures undertaken by the Group in this respect are listed in the Corporate Governance Statement.


I would like to express our gratitude to our Directors, management team, and employees for your contributions to date. I would also like to thank our valued shareholders and clients for your continued support throughout the years.

Additionally, I would like to take this opportunity to extend my appreciation to the various regulatory bodies for your constant efforts to maintain a conducive business environment for the domestic steel industry and all related stakeholders.

Thank you.

Dato’ Ikhwan Salim Bin Dato’ Haji Sujak

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