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Home / [The Edge] Masteel 4Q net profit climbs 47% y-o-y to RM12m, boosted by RM5m tax credit
By Izzul Ikram
KUALA LUMPUR (Feb 25): Malaysia Steel Works (KL) Bhd (Masteel) reported a 47% rise in net profit for the fourth quarter ended Dec 31, 2021 (4QFY21) to RM12.04 million from RM8.21 million a year earlier, boosted by a tax credit amounting RM5.06 million.
However, in a filing on Friday (Feb 25), the group said its profit before tax (PBT) slipped 42% to RM6.97 million from RM12.07 million in 4QFY20, mainly due to higher operating expenses arising from a rights issue with warrants exercise, and a foreign exchange loss.
Its quarterly revenue rose 24% to RM463.87 million from RM372.76 million a year ago, due to higher steel bar selling prices, in line with the increase in global and domestic steel prices.
For FY21, Masteel swung to a full-year net profit of RM32.5 million compared to a net loss of RM14.73 million in FY20, mainly due to higher steel bar selling prices and enhanced production cost efficiency during the year under review.
Similarly, annual revenue rose 14% to RM1.58 billion from RM1.38 billion in FY20 on the back of higher steel bar selling prices, despite recording lower sales volume.
“This strong turnaround is made even more significant against the backdrop of the disruptive Movement Control Orders in FY2021, and showcases our resilience. We are also reaping the benefits of the timely upgrading of our steel making facilities,” said Masteel managing director and CEO Datuk Seri Tai Hean Leng in a statement.
In terms of prospects, Masteel said prices of local steel bars are expected to continue to trend higher due to rising international steel prices and the gradual recovery of the Malaysian economy from the pandemic.
“Although prices of raw materials are increasing, the greater force of external demand is widely expected to eclipse the high-cost environment.
“North Asia’s commencement of the civil construction period in the spring, together with the lifting of restrictions of steel mill activities in China, are already prompting a strong rebound in domestic and international steel prices,” Tai said, adding that the group is confident of capturing the expected increase in demand.
Masteel shares closed one sen or 3.23% higher at 32 sen, giving the group a market capitalisation of RM214.12 million.
Edited by Ahmad Naqib Idris
