Malaysia Smelting Corp Bhd’s net profit plunged 64% year-on-year (YoY) to RM4.6 million in its first-quarter ended Mar 31, 2018,due to lower recovery yield, higher operating expenses and higher tin dollar prices which was partly offset by the stronger ringgit.
The performance of tin smelting division continues to be affected by the inefficiencies of aged equipment at the Butterworth smelting facility in Penang which has resulted in higher operating expenses and production costs, due to lower recovery yields,it told Bursa Malaysia Tuesday.
Operating costs have increased as the group commenced small scale refinery work as part of the testing and commissioning process at the new plant in Pulau Indah, Port Klang, CEO Datuk Patrick Yong noted in a statement.
He added the firm will be operating both smelters coherently until the new smelter reaches a stable state.
Revenue for the period declined 12% YoY to RM357 million due to lower sales quantity of refined tin and increase in average tin prices on the Kuala Lumpur Tin Market in the first three months of 2018.
The firm’s performance is expected to improve on the back of the commenced production of the new plant in Port Klang and phasing out of the production in Butterworth plant.
“Once the new smelter is fully operational, we expect recovery yields, production and cost efficiencies to be enhanced significantly,” Yong said.