KUALA LUMPUR (Feb 4): Press Metal Bhd expects a 10% to 15% increase in the production capacity at its aluminium smelter within Sarawak's Samalaju Industrial Park this year.

Speaking to reporters after the group's extraordinary general meeting today, Press Metal(fundamental: 0.65; valuation: 2.4) group chief executive officer Datuk Paul P.K. Koon said output increase would come from the planned phase three of the aluminium smelter in financial year ending December 31, 2015 (FY15).  

"We are currently constructing phase 3 of our smelter in Samalaju, which will begin operations by the fourth quarter this year (FY15). The group would also see an increased production capacity in FY16.

"As a result of the third phase expansion, we do expect to see an increased contribution to our sales and revenue for FY16. Earnings are dependant on a number of factors, but it should also move in tandem with revenue growth," Koon said.

In December last year, Press Metal told the exchange phase three of the aluminium smelter would raise group smelting capacity to 760,000 tonnes from 440,000 tonnes.

Press Metal said then it had signed a power purchase agreement with Syarikat Sesco Bhd, which would supply an additional 500MW of electricity for phase 3.

According to Press Metal, phase three's initial stage was due to start operations by 4QFY15 while stage two would begin in 1QFY18.

At 12:30pm, Press Metal shares rose one sen or 0.4% to settle at RM2.71 for a market capitalisation of RM2.98 billion.

The stock had gained 5% this year compared to the FBM KLCI's 2% advance

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)