KUALA LUMPUR (Nov 24): Steel pipe maker Choo Bee Metal Industries Bhd's net profit climbed 131% to RM10.22 million or 9.38 sen per share in the third quarter ended Sept 30, 2017 (3QFY17) from RM4.43 million or 4.06 sen per share a year earlier, boosted by stronger average selling prices and sales volume.

Quarterly revenue came in 67% higher at RM130.39 million in 3QFY17 from RM78.02 million previously, helped by both the manufacturing and trading segments.

According to its filing with Bursa Malaysia, Choo Bee said the manufacturing operations contributed revenue of RM57.1 million in 3QFY17 from RM27.1 million in the previous year, mainly attributed to higher average selling prices driving stronger market demand.

Meanwhile, its trading operations revenue stood at RM73.3 million in 3QFY17, up 44% compared to the RM50.9 million recorded in 3QFY16, due to higher metric tonne sales volume coupled with improved average selling prices.

For the cumulative nine-month period ended Sept 30, 2017 (9MFY17), the group's net profit jumped 63% to RM28.08 million against RM17.23 million previously. Revenue increased by 20% to RM329.96 million from RM275.55 million.

The group attributed the improvement in performance mainly to higher average selling prices negating the weaker market demand experienced in 2QFY17.

On prospects, Choo Bee said despite the strong international prices, current local demand has yet to rise to match the hike in prices mainly due to the cautious stance exercised by dealers as well as restocking activities carried out in the third quarter of this year.

However, the outlook for the local steel industry remains sanguine with the government's commitment under Budget 2018 to roll out infrastructure spending, which will boost the construction sector.

"This is expected to bolster stronger demand for steel consumption which will bode well for the steel industry," it added.

Shares in Choo Bee closed 15 sen or 6.52% higher at RM2.45, for a market capitalisation of RM259.28 million.