4th Sep 2013
LOCAL steelmakers reported a mixed bag of results for the second quarter of 2013 (2Q13). While Malaysia Steel Works (KL) Bhd (Masteel; 91 sen) and Southern Steel Bhd reported improved earnings, Ann Joo Resources Bhd, Perwaja and Kinsteel Bhd saw profit deteriorate from 1Q13. This could be attributed to a combination of factors such as differences in capacity and utilisation, product range as well as gearing levels.
Steel bar prices in the domestic market have been relatively resilient year-to-date, averaging between an estimated RM2,100 and RM2,200 per tonne, thanks to sustained local demand while raw material prices have softened slightly.
Masteel fared comparatively well. Turnover was marginally down year-on-year (y-o-y) at RM342.3 million, due to lower average selling prices for steel products, but was 3.7% higher from 1Q13, thanks to stronger volume demand. Domestic sales improved quarter-on-quarter (q-o-q), picking up the slack in exports in 2Q13.
Pre-tax profit saw an outsized decline, by 42.5% y-o-y to RM10.9 million, from RM18.9 million in 2Q12. The company attributed this to lower selling prices coupled with higher raw material costs in the latest quarter.
