Financial Highlights

By Tan Xue Ying

KUALA LUMPUR (Nov 29): Malaysia Steel Works (KL) Bhd (Masteel) recorded a 85% drop in net profit to RM5.87 million for the third quarter ended Sept 30 from RM38.67 million a year ago, on lower margins and higher foreign exchange losses.

Earnings per share plunged to 1.38 sen, from 12.88 sen in the year-ago quarter.

Revenue contracted 3.2% to RM388.43 million from RM401.45 million a year ago, owing to lower sales volume on a softer domestic demand.

In an exchange filing today, the steel bars and billets maker attributed the weakened earnings to lower margins and higher foreign exchange loss.

Its financial statements showed operating expenses were 30% higher during the quarter against a year ago, and it also booked RM4 million of ‘other expenses’.

For the cumulative nine months, Masteel’s net profit halved to RM31.58 million, from RM63.34 million before, notwithstanding a 10.3% year-on-year growth in revenue to RM1.15 billion from RM1.04 billion.

Masteel cautioned that declining local steel bar prices and competition from new entrants of bars and billets supply would affect its margins.

However, the group expects margins to improve with its new equipment and facilities coming on stream next year.

Masteel slid two sen to close at 42 sen for a market capitalisation of RM178.86 million. The stock is currently trading at its lowest since Dec 9, 2016.