KUALA LUMPUR: Malaysia Smelting Corp Bhd’s (MSC) net profit tripled year-on-year to RM7.48 million or 1.9 sen per share in the second quarter ended June 30, 2019 (2QFY19), from RM2.46 million or 0.6 sen per share a year ago. The better earnings were due mainly to higher profit generated by the tin mining segment.

However, its quarterly revenue came in 11.5% lower at RM289.08 million against RM326.82 million in 2QFY18, as a result of lower sales volume of refined tin.

In its exchange filing yesterday, MSC said the tin mining segment recorded a profit before tax of RM15 million during the quarter under review compared with RM9.1 million a year ago.

Its tin smelting segment, however, continued to bleed as it turned in a loss before tax of RM3.7 million due to low recovery yield, high operating expenses and operating inefficiencies in the Butterworth plant.

MSC’s improved 2Q earnings brought its net profit for the first half (1H) of FY19 to RM16.09 million, more than double compared with RM7.04 million in the previous corresponding period. Revenue for the period stood 12.8% lower at RM596.53 million compared with RM683.77 million before.

Despite the big leap in quarterly earnings, the group expects a challenging 2H19 as tariffs imposed by the US on China products have affected major electronics and smartphone manufacturers in China, hence weaker demand and price for tin solders.

MSC also warns of rising overhead costs from running two plants as a result of the rationalisation of its business operations, which is expected to impact on its financial performance for the remainder of the year.

Despite these challenging market conditions, the group said it will continue to focus on its operational efficiencies, and is currently undertaking efforts to improve on all areas of operations, technology, manpower and logistics.

“Plans to commence full operations in a new plant, using newer and more efficient technology and a more productive workforce are under way. We expect this new plant to be operational in the near term.

“Once the move is completed, with the new facility with the Isasmelt furnace, we expect to reduce operational and manpower costs, while improving our carbon footprint. In addition, the operational inefficiencies we currently face with our ageing plant in Butterworth will be eliminated,” it added.

MSC said that there should be additional tin production as its subsidiary will commence tin mining activities at Sungai Lembing, Pahang in 2H19.

The group will also look at potential joint venture mining arrangement with other parties to expand its mining activities, it wrote in the filing.

Shares in MSC closed unchanged yesterday at 84 sen, for a market capitalisation of RM336 million.