MSC ends two years of losses

PETALING JAYA: Malaysia Smelting Corp Bhd (MSC) turned around last year after posting two years of losses, announcing earnings of RM37.45mil for the financial year ended Dec 31, 2016 (FY16).

In a filing with Bursa Malaysia, the world’s second-largest tin metal supplier said the swing from a net loss of RM4.8mil in 2015 was achieved on a 1% higher revenue of RM1.48bil.

MSC attributed the better results to higher tin prices and gains from the strengthening US dollar (its sales were quoted in the currency).

MSC’s core operations are driven by the international smelting business and the Rahman Hydraulic tin mine, the country’s largest tin mine.

It said the Butterworth smelter delivered a pre-tax profit of RM22.89mil compared with a pretax loss of RM5.48mil in 2015.

Rahman Hydraulic tin mining operations, meanwhile, recorded a pre-tax profit of RM40.3mil versus RM14.19mil in 2015. This was mainly due to a bigger sales quantity and higher tin prices in 2016.

During FY16, MSC also recognised a net gain arising from a fair value adjustment of the land and buildings of RM2.9mil.

For the fourth quarter (Q4), the tin producer reported a net profit of RM5.5mil against a net loss of RM7.4mil a year earlier. Revenue, however, slipped 1% to RM350.14mil.

MSC said the improved Q4 profit was mainly due to a higher share of profits from associates and joint ventures, arising from a reversal of provision for tax liabilities recorded in the second quarter of 2016. This was offset by a higher cost of sales and higher impairment of receivables.

On the current-year prospects, the company said despite the improvement in tin prices, market conditions remained challenging, as the global commodity and resource sectors were still volatile.

In a press statement, MSC chief executive officer Datuk Patrick Yong said the volatility of tin prices continued to be one of the biggest challenges facing the industry.

“We will take significant steps to stay ahead of the pack and mitigate the impact of fluctuating prices,” he added.

The company’s board has proposed a first and final dividend of eight sen for FY16 (FY15: nil).