MSC posts RM40m net profit for 2Q22 on high tin prices

by TMR / TMRgraphic

MALAYSIA Smelting Corp Bhd (MSC) saw its net profit for the second quarter of 2022 (2Q22), soar 13.5 times to RM39.5 million from RM2.9 million in the same quarter last year.

On a year-on-year (YoY) basis, the company said in an exchange filing yesterday that its net profit increased four-fold to a historic high of RM103.8 million from RM25.1 million a year earlier.

The tin miner and metal producer 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 last year onwards.

“We are delighted to have recorded strong growth in the first half of 2022 (1H22), despite the easing of tin prices in 2Q22. Tin, like other base metals, had been affected by geopolitical tensions and China’s zero-Covid policy, which contributed to softer demand,” said MSC Group CEO Datuk Dr Patrick Yong in a statement.

For 1H22, MSC’s revenue grew by 27.4% YoY to RM768.3 million compared to RM603 million in 1H21.

For 1H22, tin prices rose 52% to RM169,700 from RM111,500 per metric tonne in 1H21.

The group’s tin smelting arm turned a net profit of RM21.3 million against a net loss of RM2.8 million a year ago.

The growth was primarily attributable to improved margins from the sale of refined tin derived from the processed tin intermediates and positive tin price movements.

The tin mining division also benefitted from the elevated tin prices, as net profit more than doubled to RM78 million in 1H22 from RM36.2 million in 1H21.

During this time, the group’s tin ore production volume also expanded, contributing to higher earnings.

Yong added that market sentiment is anticipated to improve as China reopensed 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.”

MSC looks forward to an improved production yield and efficiencies from its new Pulau Indah smelter which uses the more efficient Top Submerged Lance furnace technology.

“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 added that MSC will embark on the exploration and mining of tin resources within Asas Baiduri’s land in the next few years.

He explained that the addition of Asas Baiduri’s 568-acre (229.86ha) 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 financial year 2022,” he said.

 

 

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