Masteel 2Q net profit surges 92% to RM15.48m

by **hlk** Wed 24 Aug 2011, 22:24

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd net profit for the second quarter surged 92% to RM15.48 million from RM8.07 million a year earlier, due mainly to strong demand in both domestic and overseas markets, as well as improved selling prices.

It said on Wednesday, Aug 24 that its revenue for the quarter rose 43.4% to RM337.98 million from RM235.66 million in 2010.

Earnings per share rose to 7.35 sen from 4.06 sen, while net assets per share was RM2.36.

For the six months ended June 30, Masteel’s net profit rose 50.2% to RM21.67 million from RM14.42 million in 2010, while revenue was up 44.1% to RM616.4 million from RM427.78 million.

The company said the better bottom line for 1H11 was also due to lower effective tax rate as a result of utilisation of reinvestment allowance of RM4.7 million and prior-year tax overprovision of RM1.3 million.

In a statement Aug 24, Masteel managing director and chief executive officer Datuk Seri Tai Hean Leng said the company’s production facilities were currently operating at high utilisation rate of about 83% in order to cope with the rising demand for steel bars in the CONSTRUCTION [] industry in the region.

He said that during the quarter, Masteel sold 40% more in tonnage than it did in the same quarter of last year, mainly due to robust demand from the local housing construction sector and the commencement of major public sector projects, such as the RM2-billion Low Cost Carrier Terminal (LCCT).

He said Masteel’s overseas sales increased by about two folds to RM125 million, making up about 37% of the total revenue for the quarter under review.

On its prospects, Tai said Masteel was still optimistic of its financial performance for the financial year ending Dec 31, 2011, notwithstanding the economic headwind in Europe and United States, due to the fact that demand for steel products in the domestic market will continue to be spurred by the upcoming Klang Valley MRT project.

“With Masteel’s factories strategically located in Petaling Jaya and Klang, we are certainly in good stead to be one of the key suppliers of steel bars for the mega project,” he said.