Malaysia Steel Works (KL) Bhd (Masteel) saw its net profit for 3QFY10 ended Sept 30 slump 64.31% to RM4.76 million from RM13.35 million a year earlier mainly due to an investment writeoff and losses on the disposal of shares in a subsidiary amounting to RM5 million and RM4.73 million, respectively.
The writeoff refers to an investment in bonds while the loss on disposal of shares in a subsidiary refers to a reduction in shareholding in Bio Molecular Industries Sdn Bhd.
Excluding these items, net profit for the quarter would have been 8.54% higher at RM14.49 million compared with RM13.35 million a year ago.
In an announcement to Bursa Malaysia here yesterday, Masteel, the country’s third-largest steel bar maker by market share, said higher sales volume had driven up revenue by 45.64% to RM285.03 million from RM195.71 million a year ago.
Earnings per share (EPS) were lower at 2.35 sen versus 6.86 sen last year. Net assets per share remains the same at RM2.14 as at Sept 30, compared with Dec 31, 2009.
For the nine-month period ended Sept 30, Masteel posted a net profit of RM19.19 million compared with a net loss of RM 19.05 million a year ago on the back of 43.83% increase in revenue to RM712.81 million from RM495.58 million.
EPS for the period stood at 9.46 sen compared with a loss per share of 9.79 sen a year earlier. Notably, the company’s total cash position increased by 16.11% to RM 46.41 million as at Sept 30 from RM39.97 million a year ago.
Moving forward, Masteel said demand for steel bars and billets is expected to remain well supported in the ensuing months with the record sales of commercial and private properties in the domestic housing sector,
“The margins for the company’s products are expected to be reasonable throughout the rest of the year as steel prices are trending within a narrow range,” it said.
This article appeared in The Edge Financial Daily, December 1, 2010.
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