KUALA LUMPUR (Feb 28): Metrod Holdings Bhd posted a 38.07% decline in net profit for the fourth quarter ended Dec 31, 2016 (4QFY16) to RM3.84 million from RM6.2 million a year earlier.

Revenue declined by a marginal 0.58% to RM453.3 million from RM455.93 million in 4QFY15 on lower copper prices, Metrod said in a bourse filing.

“Demand for copper products in Malaysia remained weak. Export markets during the current quarter also remained weak and especially exports to India were impacted by demonetisation,” the company said, adding that competition remained intense.

“Credit, commercial and security risks remained high due to the difficult conditions in financial markets and volatile copper prices,” it added.

For the full FY16, net profit was down 52.35% to RM12.75 million from RM26.75 million in FY15, due to an exchange translation gain in FY15 from sale proceeds held in US dollars arising from disposal of international operations in 2012.

Revenue for FY16 rose slightly by 2.83% to RM1.78 billion from RM1.73 billion in FY15, following inclusion of revenue from hotel operations, the group said.

“Hotel operations for the year were satisfactory as the foreign tourist arrivals picked up in the fourth quarter. However, demonetisation of high value currency temporarily impacted the Meetings, Incentives, Conferences and Events business,” Metrod said.

Looking forward, the company expects exports to be impacted by volatility in ringgit and oil prices, as well as the recent demonetisation in India coupled with uncertainty in the US and global markets.

“The group is able to manage the copper and exchange exposure due to its hedging policies.

“We are currently facing uncertain times and are preparing ourselves to mitigate its impact including evaluation to make major investment to expand the capacity and reduce the operating costs,” it said.

However, Metrod said the outlook is positive with regards to the hotel operations segment.

“With the improvement in domestic leisure travel and foreign tourist arrivals, business conditions are expected to improve,” it added.