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

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

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