Melewar 4Q net loss narrows to RM9.88m

KUALA LUMPUR: MELEWAR INDUSTRIAL GROUP BHD [] net loss for the fourth quarter ended June 30, 2011 narrowed to RM9.88 million from net loss RM26.89 million a year earlier.

It said the net loss in 4Q 2010 was higher primarily due to the fair value loss on Gindalbie shares amounting to RM33.7 million.

The company also said on Monday, Aug 29 that its principal subsidiary, Mycron Steel Berhad, registered a loss before tax of RM3.8 million, compared to a profit before tax of RM5.5 million in the corresponding quarter of the preceding year.

The loss position was primarily contributed by a decreased sales volume, a lower sales margin and an adverse movement in foreign exchange differences, it said.

Reviewing its performance, Melewar said that its revenue for the quarter rose 6.8% to RM213.28 million from RM199.72 million in 2010 due mainly from the power generation segment as the power plant held under a subsidiary in Thailand had commenced operations from January 2011.

Loss per share was 4.38 sen compared to loss per share of 11.92 sen in 2010, while net assets per share was RM2.40.

For the financial year ended June 30, Melewar’s net profit fell to RM5.79 million from RM67.63 million, despite a 6.31% increase in revenue to RM751.83 million from RM707.15 million in 2010.

On its prospects, Melewar said the global economic outlook remains uncertain with the debt crisis in the EU countries and the US.

It said that domestically, although market conditions stabilised in early 2011 when moderate re-stocking took place, the temporary uptrend was not due to economic recovery but mainly due to speculative buying as steel mills were trying to increase the prices.

Stockists are still very cautious and careful in placing order and taking deliveries as the market demand for steel products were still low, its aid.

“The group expects to achieve satisfactory results for the second half of the calendar year 2011 as we expect the market conditions to start improving.

“However, this would also depend on the health of the local as well as the global economy, “ it said.

Melewar also said the power generation segment which commenced operations in January 2011 had started to contribute revenue in the last two quarters.

“The performance of this segment should improve significantly in the new financial year in view of the anticipated increase in the power consumption of one of its major offtakers and in view of the full year of operations,” it said.