KUALA LUMPUR: Tashin Holdings Berhad posted a strong set of financial results for the first quarter ended March 31,2021 as its net profit surged by 16-fold to RM12.23mil from RM720,000 a year earlier.
Tashin, which produces steel products, announced on Monday the strong earnings growth was driven by higher demand for its steel products and selling price.
Its revenue jumped 55.2% to RM95.22mil from RM61.35mil a year ago. Earnings per share rose to 3.51 sen from 0.21 sen previously.
Its managing director, Lim Choon Teik said the strong earnings and revenue growth were due to to higher demand for its steel processing products which were slit coils/steel sheets and its steel manufacturing products comprising steel pipes, flat and square bars, expanded metals and checkered plates.
“The company experienced improved sales for its steel products and profit margin during 1QFY2021 as the economy saw a gradual return to normalisation while business sentiments improved after one year of the Covid-19 pandemic.
“Our revenue from the steel processing products increased by 45% to RM68.85mil for 1QFY2021 from RM47.57mil a year ago.
“Our steel manufacturing products also recorded strong revenue growth in 1QFY2021, jumping by 91% to RM26.37mil from RM13.78mil a year ago, ” he added.
On the company’s prospects, Lim said as the economic recovery picks up, it would boost demand from steel processing segment and steel pipes and also see increased sales order from automotive segment.
However, Tashin is cognisance about the shortage of certain types of steel material such as cold rolled materials may post a challenge to the company’s operations and an interruption in the supply chain.
“Barring unforeseen circumstances, the board is cautiously optimistic that the company’s prospects for the coming quarter would remain positive and satisfactory due to higher demand in the steel processing segment and steel pipes and increased sales order from automotive segment, ” he added.
Tashin is also expanding its operations by increasing the production capacity in steel processing product of slit coils, steel sheets and steel products manufacturing as the Group aims to grow the existing core business.
On April 23, Tashin’s unit Tashin Hardware Sdn Bhd announced it was expanding its steel production capacity by acquiring two pieces of land and buildings in Prai Industrial Estate Phase IV, Penang for RM43.50mil.
The company intends to shift the existing steel products manufacturing line to a new factory. This will enable it to expand its steel processing manufacturing facilities by adding new slitting and shearing line and increase storage capacity for raw materials and finished products at existing factory.
The stronger prices for its steel products, with the production expansion underway, will put the company on a much firmer financial footing and it will be able to tap into the growing demand.