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[TheEdge] Masteel seeks to raise up to RM81.5m from rights issue

Monday, December 7th, 2020

By Shahirah Syed Jaafar

KUALA LUMPUR (Dec 7): Integrated steel manufacturer Malaysia Steel Works (KL) Bhd (Masteel) has proposed a rights issue with free detachable five-year warrants to raise up to RM81.5 million.

In a statement today, Masteel said the rights shares would be issued on the basis of one rights share for every two existing Masteel shares held, on an entitlement date to be determined later. Subsequently, one free detachable warrant would be issued for each rights share subscribed by shareholders.

From the RM81.5 million expected to be raised, up to RM69 million would be utilised for working capital requirements, while RM10 million would be used to repay bank borrowings, and the balance RM2.5 million to defray the estimated exercise expenses, the group said.


“We are witnessing an upcycle in steel demand within both the local and regional markets, as governments prioritise high-multiplier infrastructure developments and construction projects to stimulate economic growth. This is clearly advantageous for established steel manufacturers like us, who have both capacity and competitiveness to reap the benefits of this recovery.

“To this end, our recent capital expenditure investments in employing the latest steel melting technology will optimize our cost-efficiency,” Masteel managing director and CEO Datuk Sri Tai Hean Leng said in the statement.

Assuming all treasury shares are sold as at the date of the announcement, the rights issue with warrants will entail the issuance of up to 226.4 million rights shares, together with up to 226.4 million warrants,the group said.

The rights issue with warrants would expand Masteel’s share capital from RM239.9 million comprising 450.4 million shares, to RM402.9 million comprising 905.5 million shares.

Masteel said the exercise, which is expected to be completed in the second quarter of 2021, is not expected to have any material effect on the earnings of the group for the financial year ending Dec 31, 2020.

Shares of Masteel closed one sen or 2.13% higher at 48 sen today, for a market capitalisation of RM217.32 million.

Edited by S Kanagaraju

[The Star] Masteel records fall in Q3 profit

Saturday, November 21st, 2020

Regarding its prospects, Masteel said the group expects a steady improvement in its financial performance in the ensuing quarters, due to improved demand for its steel products and operating margins

PETALING JAYA: Malaysia Steel Works (KL) Bhd or Masteel posted a 95.7% year-on-year drop in net profit to RM3.8mil for its third quarter ended September 30,2020.

However, it should be noted the RM86.7mil net profit a year earlier was mainly due to a RM76.6mil land revaluation surplus recognised a year earlier.

Revenue for the quarter under review was 54.3% higher year-on-year to RM417.5mil mainly due to higher sales volume and selling price as a consequence in the recovery of global steel demand.

For the nine months under review, Masteel posted a net loss of RM22.9mil compared with a net profit of RM67.6 mil a year ago, while revenue grew 19.6% year-on-year to RM1.01bil.

It also pointed out that the expansionary 2021 Budget has highlighted the projected growth of the Malaysian construction sector of 13.9% in 2021 valued at RM61.34bil.

[TheEdge] Masteel returns to black in 3Q on better margin, demand rebound

Friday, November 20th, 2020

By Justin Lim

KUALA LUMPUR (Nov 20): Integrated steel maker Malaysia Steel Works (KL) Bhd (Masteel) returned to black with a net profit of RM3.77 million in its third quarter ended Sept 30, 2020 (3QFY20), from a net loss of RM22.53 million in the previous quarter, as it saw better margin and a rebound in demand for its steel products, amid a strong recovery in the international and local steel market.

Revenue more than doubled quarter-on-quarter to RM417.49 million from RM195.63 million, thanks to higher selling price and volume, its stock exchange filing today showed.

Year-on-year, however, its net profit was down 96% from RM86.73 million in 3QFY19, mainly because the previous year had recorded a land revaluation gain of RM76.65 million.

Profit before tax, meanwhile, tripled y-o-y to RM6 million from RM2.1 million, while revenue jumped 54% from RM270.6 million previously, in line with global recovery of demand for steel and lower operating expenses.

For the cumulative nine months period ended Sept 30, it recorded a net loss of RM22.94 million versus a net profit of RM67.66 million a year ago, though revenue rose 20% to RM1.01 billion from RM845.45 million.

On prospects, the company expects to see a steady improvement in its financial performance in the coming quarters, driven by improved demand for its steel products and operating margins.

The group believes it would be able to ride on the recovery wave in the construction sector, which it expects will be a catalyst to drive demand for steel products.

Masteel’s share price closed up half a sen or 1.56% to 32.5 sen today, giving it a market capitalisation of RM146.37 million.

Edited by Tan Choe Choe

[NST] Masteel’s Q3 net profit drops on deferred tax, revenue more than doubles

Friday, November 20th, 2020

By Azanis Shahila Aman

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd’s net profit fell 62.4 per cent to RM3.8 million in third quarter (Q3) ended September 2020 from RM10.1 million last year due to larger deferred tax recognised in the previous year’s corresponding quarter.

Masteel, an integrated steel manufacturer, tripled its pre-tax profit to RM6.0 million in Q3 from RM2.1 million a year ago, buoyed by a 54.3 per cent jump in revenue to RM417.5 million from RM270.6 million previously.

“The vast improvement in financial performance was mainly attributed to higher sales volume and selling prices in line with the recovery of global demand for steel, as well as lower operating expenses,” it said. 

Masteel posted a convincing turnaround after incurring a net loss of RM22.5 million in the preceding quarter. 

The return to profitability was due to improved margins from the better utilisation of the new plant and equipment and lower operating expenses in Q3, as well as the preceding quarter’s operational disruptions caused by the implementation of the Movement Control Order (MCO).

Stronger demand for steel products on a quarter-on-quarter basis resulted in Q3 revenue more than doubling from RM195.6 million last year. 

For the cumulative nine-month period, Masteel posted 19.6 per cent higher revenue of RM1.0 billion versus RM845.5 million last year. 

Managing director and chief executive officer Datuk Sri Tai Hean Leng said the company’s commendable Q3 outperformance had underscored two primary points. 

Tai said firstly, the company was able to rapidly return its operations to normalcy after the disruptive period of the MCO. 

“More than just demonstrating the management’s extensive experience, it is also testament to the superior technology of our integrated plant that facilitated the quick rebound.

“Secondly, with our operations now running full speed ahead, Masteel is therefore well-poised to meet the anticipated demand for steel products in the construction sector, particularly as Malaysia gears up to carry out various infrastructure megaprojects as indicated in the expansionary 2021 Budget,” he said. 

Tai said Masteel’s two manufacturing facilities were ideally based in Petaling Jaya and Bukit Raja in Selangor, hence enabling the company to support the requirements of projects from Klang Valley to Johor and across the East Coast of Peninsular Malaysia in a timely manner.

“We look forward to reprising our role in supporting this key industry, and even more so as Malaysia’s development aspirations gather momentum in the years to come,” he added.

[Malay Mail] Masteel’s net loss widens in second quarter of 2020

Friday, August 28th, 2020

KUALA LUMPUR, Aug 28 ― Malaysia Steel Works (KL) Bhd’s (Masteel) net loss widened to RM22.53 million in the second quarter ended June 30, 2020 (2Q20), from RM10.39 million registered in the same quarter last year.

In a filing to Bursa Malaysia, the steel bars and steel billets manufacturer said its revenue fell to RM195.63 million during the reviewed quarter versus RM294.48 million

“The decrease in revenue in the current quarter was mainly attributed to lower sales volume and selling price due to the negative impact of economic disruptions resulting from the country’s implementation of the movement control order (MCO) in order to curb the spread of the Covid-19 pandemic,” it said.

Moving forward, Masteel said demand for the group’s steel products are expected to continue to improve from the lows of 2Q20.

The unit selling prices are expected to gradually increase to offset the surge of raw material prices resulting from the broad global recovery of demand for steel, it said.

“The company is focused on improving its costs of production, and barring any unforeseen circumstances expects to see improvement of its business results towards the later part of the year,” it added.

No dividend was declared by Masteel during 2Q20.

[The Edge] Masteel posts full-year net loss in FY19

Friday, February 21st, 2020

By Tan Xue Ying

KUALA LUMPUR (Feb 21): Malaysia Steel Works (KL) Bhd (Masteel) posted a net loss for its financial year ended Dec 31, 2019 (FY19), its first annual loss since 2015, impacted by lower margin resulting from the lower selling price and higher finance charges from increased borrowings during the year.

Masteel said this in an exchange filing today, which showed that the group made a net loss of RM8.3 million on lower revenue of RM1.2 billion versus a net profit of RM6.7 million on the back of RM1.5 billion revenue for FY18.

This was despite it registering a net profit in its fourth quarter (4QFY19), at RM688,000, compared with a net loss of RM24.87 million in 4QFY18, helped by a better margin during the quarter as a result of the company’s technology-driven cost-cutting measures.

Quarterly revenue increased marginally to RM349.86 million, from RM348.93 million in the corresponding quarter last year, on higher sales volume.

Masteel said it is confident that it will continue to experience steady demand for its steel products and margin improvements in the quarters ahead.

It noted that the recent rebounding of iron ore prices towards the US$90 per metric tonne level has caused the prices of steel bars in the region, as well as in Malaysia, to be well supported.

“The general domestic market continues to be well supplied with steel bars. In the Klang Valley, the demand has been adequate to enable the company’s plants to operate at a high utilisation rate.
“The present market situation that has been retarded by the recent major North Asia health crisis is not expected to have a lasting effect on the demand for the company’s steel products,” it added.

Shares in Masteel closed one sen lower today at 39.5 sen, valuing the steel bars and billets manufacturer at RM178.17 million.

[The Edge] Masteel 3Q net profit up 72% on higher tax credit

Friday, November 22nd, 2019

By Wong Ee Lin

KUALA LUMPUR (Nov 21): Malaysia Steel Works (KL) Bhd’s (Masteel) net profit jumped 71.63% to RM10.08 million or 2.37 sen per share for the third quarter ended Sept 30, 2019 from RM5.87 million or 1.38 sen per share a year earlier, thanks to higher tax credit.

This is Masteel’s first profitable quarter after three consecutive loss-making quarters.

In a filing with Bursa Malaysia today, the group said its tax credit quadrupled to RM7.98 million during the quarter from RM1.92 million previously.

This was despite a 30.35% decline in quarterly revenue at RM270.55 million from RM388.43 million previously, due to lower sales volume and selling price.

For the nine-month period, Masteel posted a net loss of RM8.99 million or 2.11 sen a share, versus a net profit of RM31.57 million or 7.44 sen a share a year ago, while revenue slipped 26.35% to RM845.45 million from RM1.15 billion.

On prospects, the group expects a gradual recovery towards the end of the year and this turnaround is expected to gather strength in 2020.

“The local demand for steel bars has rebounded from a trough in September 2019,” Masteel said.

Masteel added it is continuing to fine tune its new plant and machinery to ensure that the delivery of healthier performance is in line with the recovery of steel demand in the coming year.

Shares of Masteel closed half a sen or 1.43% lower at 34.5 sen today, valuing the company at RM147.79 million

[KwongWah] 马钢铁工程 料向麦格理银行配股

Saturday, September 21st, 2019

马钢铁工程(隆)(MASTEEL,5098,工业产品组)计划向麦格理银行(Macquarie Bank Ltd)出售4250万股新股,以筹集现金并减低债务。

这家钢筋制造商致函大马交易所表示,新股售价38仙,并在未来12个月内分几批出售。

若以拟议中的发行价计算,它将可筹集1615万令吉的资金。

在筹集的资金中,1598万令吉将用于偿还其贸易贷款。

马钢铁工程说:“拟议中的私下配股将减少我们现有的贸易贷款,从而使我们能够节省融资成本。”

[The Edge] Masteel proposes private placement to repay borrowings

Friday, September 13th, 2019

By Ahmad Naqib Idris

KUALA LUMPUR (Sept 13): Malaysia Steel Works (KL) Bhd (Masteel) has proposed a private placement of up to 42.5 million shares to Macquarie Bank Ltd, as the group looks to raise cash to repay its bank borrowings.

In a filing with the bourse, Masteel said it had entered into a conditional share subscription agreement with Macquarie Bank, in relation to the issuance of up to 42.5 million placement shares, which represent about 10% of its total number of issued shares.

The group said the placement is expected to be implemented in multiple tranches within 12 months from the date on which the conditions precedent in the subscription agreement are fulfilled.

The agreement entails Macquarie Bank’s right to initially subscribe for up to 25.5 million placement shares for the first tranche and the conditional right to further subscribe for up to 17 million placement shares for the second tranche.

Masteel said the subscription price of each placement share will be equal to 91% of the volume weighted average price of its shares during the five consecutive trading days immediately preceding the subscription date.

Assuming an indicative issue price of 38 sen per share, the exercise would be able to raise RM16.15 million in proceeds, of which some RM15.92 million will be used to repay borrowings from Kuwait Finance House (Malaysia) Bhd, while the balance of the funds will be used to cover estimated expenses for the exercise.

“After considering various fund-raising options, the board has decided to pursue the proposed private placement as it will enable us to raise funds expeditiously and in a cost efficient manner.

“In addition, the proposed private placement will reduce our existing trade lines, thus allowing us to save on finance cost. The proposed private placement to be implemented via the subscription agreement will also serve to enhance trading liquidity of Masteel’s shares,” said the group.

Upon completion of the placement, Masteel’s share capital will grow to 468.06 million shares or RM244.92 million, from 427.24 million shares or RM230.09 million.

Masteel’s share price fell one sen or 2.35% to close at 41.5 sen, giving a market capitalisation of RM177.3 million.

[The Star] Masteel to place out new shares to Macquarie Bank

Friday, September 13th, 2019

KUALA LUMPUR:  (Masteel) plans to place out 42.5 million new shares to Macquarie Bank Ltd to raise cash and reduce its debts.

The new shares will be sold at 38 sen each, spread over in several tranches over the next 12 months, the steel bar maker said in a filing with Bursa Malaysia today.

As the proposed issue price, Masteel will raise RM16.15mil.

Of the amount, RM15.98mil will be utilise towards repayment of its trade lines.

“The proposed private placement will reduce our existing trade lines, thus allowing us to save on finance cost,” Masteel said.

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