Higher aluminium prices lift Press Metal’s earnings in Q2

KUALA LUMPUR: Press Metal Aluminium Holdings Bhd, the largest aluminium smelter in South East Asia said earnings in the second quarter ended June 30 improved 7% on higher selling product prices.

The company, in a statement Wednesday, said its second quarter performance was buoyed by higher aluminium selling prices, as well as a stronger US dollar.

These benefits, however, were offset by increased raw material prices caused by alumina supply disruptions from Brazil.

Three months net profit at Press Metal climbed to RM160.6mil compared with RM150.2mil made previously. Revenue rose by almost a quarter to RM2.4bil.

The company said US tariffs and sanctions continue to be the root of uncertainties in the global supply chain, and the situation is amplified by the on-going alumina supply disruptions.

Despite the challenges, Press Metal’s group CEO Tan Sri Paul Koon is forging ahead with his expansion plans.

“The increased capacity in both our value-added and extrusion businesses are in line with our plans to expand into new markets,” he said. “With more diversified coverage, we will be able to mitigate susceptibility to jurisdictional policies.”

The group has a joint venture with Sunstone Development Co Ltd in China for the manufacturing of pre-baked carbon anodes. This is a key raw material for its smelting activities.

The plant is under construction and on-track for commissioning in the last quarter of this year.

“Our plan to increase our value-added products from our smelting operations is panning out well and we are on our way to achieve 50% contribution by the end of the year,” Koon said.

Aside from providing better margins, the move he said will strengthen Press Metal’s position in the market and branding in the long run.

The company has also increased its extrusion capacity in both Kapar and Foshan plants by approximately 30%.

“We are still on a growth path and evaluating suitable opportunities for inorganic expansion,” Koon said.

Corporate News , Press Metal