Press Metal 3Q profit falls on lower aluminium prices, absence of exceptional income

TheEdge Thu, Nov 28, 2019 07:12pm - 4 years View Original


KUALA LUMPUR (Nov 28): Press Metal Aluminium Holdings Bhd turned in a net profit of RM121.51 million for the third quarter ended Sept 30, 2019 (3QFY19), down 25.2% from RM162.49 million in the year-ago quarter, as aluminium prices fell.

The previous year's performance also benefitted from a net exceptional income of RM34.65 million, which comprised, among others, an insurance claim, the group's stock exchange filing today showed.

Excluding the exceptional income, the group's core profit before tax for 3QFY18 would be RM206.51 million instead of RM241.16 million, Press Metal said, in contrast to 3QFY19's RM168.94 million.

Quarterly revenue contracted 10.7% on-year to RM2.12 billion from RM2.37 billion. Notwithstanding the weaker quarterly earnings, Press Metal approved a third interim dividend of 1.25 sen per share, payable on Dec 30.

For the cumulative nine-month period, the group's net profit fell 28.3% to RM339.5 million from RM473.57 million a year ago, while revenue slipped 7.3% to RM6.43 billion from RM6.94 billion.

In a statement, group chief executive officer Tan Sri Paul Koon expects the full effect of lower alumina costs to be reflected in the next quarter as raw material prices are foreseen to remain favourable for the rest of the year.

The group also sees an increase in demand for aluminium as investments continue to flow into the Southeast Asian region.

"We expect investments to continue flowing into this region which will potentially increase the demand for aluminium, given that aluminium is the metal of choice for many industries due to its unique properties. Levying on our position as the largest aluminium smelter in the region, we are well positioned to seize this opportunity to increase our presence in the region," he said.

He also updated that its Phase 3 smelter is currently on schedule to meet its commissioning target in the fourth quarter of 2020.

"We are also pleased to have entered into the definitive agreement to subscribe for 25% equity interest in PT Bintan Alumina Indonesia. This signing is timely as we are expanding our smelting operations, with on-coming higher production volume from Phase 3. It allows us to have better security of our raw materials supply and pricing," Koon added.

Shares of Press Metal finished three sen lower at RM4.77 today, valuing the group at RM19.26 billion.

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