KUALA LUMPUR: Steel products and equipment maker, Prestar Resources Bhd reported a strong set of financial results in the first quarter ended March 31,2021 boosted by firm demand for its steel products.
It announced on Wednesday 1Q net profit jumped to RM18.34mil from RM4.06mil a year ago while revenue increased by 49.6% to RM140.18mil from RM93.70mil. Its earnings per share rose to 9.45 sen from 2.09 sen previously.
Prestar attributed the strong financial performance due the strong demand for its steel products from its various customers in different segments of the industry as the economic recovery picked up pace despite the travel curbs due to the Covid-19 pandemic.
Demand remained stronger in 1Q despite the re-imposition of the Movement Control Order (MCO) and the Conditional MCO (CMCO) in most of the states in the quarter under review.
Group managing director Datuk Toh Yew Peng said strong performances by most of the subsidiaries were in line with the higher export growth registered by Malaysia.
“The company’s steel pipes and guardrails divisions recorded strong demand from our customers from different sectors which increased their purchases despite the higher material prices.
“This resulted in an impressive growth in net profit for the just ended quarter due to better margins for our products aided by contributions from our two associate companies of the group namely, Posco-MKPC Sdn Bhd and Tashin Holdings Berhad” he added.
Toh said for the steel industry, especially the flat steel players, the post lockdown recovery in demand from the rest of the world was stronger than expected and this caused a global shortage and rising global steel prices.
“This resulted in Prestar experiencing higher demand for its products with better margins. The board expects this trend to continue for the remaining financial year, ” he added.
Prestar also plans to place out up to 10% of its issued shares to raise around RM20.50mil.
This will enable the company to remain competitive and maintain its sustainable growth as well as to pare down borrowings.
It will also use the proceeds from the placement exercise to finance the upgrading of the automation of some of its production facilities and capital expenditure.