KUALA LUMPUR (Aug 14): Choo Bee Metal Industries Bhd's second quarter net profit rose 62.51% on-year to RM10.25 million from RM6.31 million, on higher selling prices and better margins.

Earnings per share for the quarter ended June 30, 2018 increased to 9.41 sen from 5.79 sen previously, the steel maker said in a filing with Bursa Malaysia today.

Also supporting profit growth was better revenue, which rose 19.9% to RM122.59 million from RM102.24 million, said Choo Bee.

The higher quarterly revenue, it said, was due to higher contribution from the trading segment which also saw higher sales volume but offset by lower contribution from the manufacturing segment.

Choo Bee said its cumulative net profit for the first two quarters of FY18 rose 15.68% to RM20.66 million, from RM17.86 million in the January-June period of FY17.

Half-year revenue rose 18.86% to RM237.19 million from RM199.57 million previously.

While steel demand is expected to see a recovery moving forward, Choo Bee warned that the rising US-China trade tension as well as EU monetary policy changes "could erode this momentum" although there is no discernible impact yet.

"Over the past month, new players are also seen entering the Asean regional market as exporting mills scour for new markets as substitute to the US," it said.

Further, domestic policy changes and measures by the new government to cut expenditure could slow down infrastructure projects, Choo Bee said, noting that this could negatively affect steel demand.

However, it expects the impact to be temporary. "Such measures are believed to augur well for the future and will place the country's economy on a firmer footing," it added.

Shares of the steelmaker rose 3 sen or 1.62% to close at RM1.88 today for a market capitalisation of RM207.72 million.