MSC reports over 13-fold profit jump in 2Q

KUALA LUMPUR: Malaysia Smelting Corp Bhd's (MSC) net profit jumped over 13 fold to RM39.45mil in the second quarter ended June 30 (2Q) boosted by higher average tin prices.

The tin miner and metal producer said the average tin prices in the second quarter was RM158,900 per tonne from RM122,900 in 2Q21.

“The group is expected to continue benefiting from the current tin price, despite inflationary pressures, higher logistics, and operating costs in its smelting and tin mining businesses.

“Nevertheless, the group remains cautious, and will continue to focus on its operational efficiencies and improve on all areas of operations, technology, manpower and logistics,” it said.

MSC’s revenue jumped 25% to RM408.84mil in 2Q22 from RM327.132mil a year ago while earnings per share (EPS) for the period rose to 9.40 sen against 0.70 sen previously.

In the first half to June 30, MSC’s revenue grew by 27.4% year-on-year (YoY) to RM768.3mil as compared to RM603mil in the previous year’s corresponding period.

Its net profit jumped more than 4-fold to a historic high of RM103.8mil, or 24.70 sen EPS from RM25.1mil, or 6.30 sen EPS a year earlier.

MSC said the strong performance was mainly driven by high tin prices as well as increased tin production with the absence of operational disruptions due to the full movement control order from June 1, 2021 onwards.

For the first six months of 2022, tin prices rose 52% to RM169,700 from RM111,500 per tonne in 1HFY21

Group chief executive officer Datuk Dr Patrick Yong said tin, like other base metals, had been affected by geo-political tensions, as well as China’s zero-Covid policy, which contributed to softer demand.

“Nonetheless, market sentiment is anticipated to improve as China re-opens its economic sectors with the lifting of the lockdown. With that in mind, we foresee tin prices to hold up higher than pre-pandemic levels in the near to mid-term,” he said.

“With the new Pulau Indah smelter which uses the more efficient Top Submerged Lance (TSL) furnace technology expected to reach full capacity in 4Q22, we look forward to improved production yield and efficiencies. In addition, the savings generated as a result of reduced manpower and lower carbon footprint will enhance our overall competitiveness as a smelter.

“For our tin mining operations, we remain focused on enhancing our overall mining output. With the recent completion of the acquisition of Asas Baiduri Sdn Bhd on July 4, 2022, our immediate focus will be to further expand Rahman Hydraulic Tin’s existing mining pit eastward which will enable us to expand our daily mining output,” Yong said.

He said MSC would embark on the exploration and mining of tin resources within Asas Baiduri’s land in the next few years.

The addition of Asas Baiduri’s 568-acre land will provide MSC with a long-term supply of tin deposits and further extend MSC’s mining operations.

“All in all, MSC’s outlook remains bright supported by tin’s positive prospects and our strategic initiatives to enhance efficiencies across the group. Based on these factors, we expect to sustain our growth trajectory for FY2022,” Yong said.

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MSC , Malaysia Smelting Corp , tin , Patrick Yong


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