KUALA LUMPUR (Feb 24): Malaysia Smelting Corp Bhd (MSC) swings to full-year net loss due to provision for financial guarantee relating to its operations in Indonesia, higher cost pressures leading to lower profit margin and a negative impact of foreign currency translation.

MSC (fundamental: 0.7; valuation: 0.6) posted a net loss of RM9.87 million for the financial year ended Dec 31, 2014 (FY14) compared with a net profit of RM16.78 million in FY13.

Revenue, however, was up 21.1% to RM1.92 billion from RM1.58 billion in FY13. It posted a loss per share of 9.9 sen versus an earnings per share of 16.8 sen a in FY13.

For the fourth quarter ended Dec 31, 2014 (4QFY14), MSC posted a net loss of RM511,000 compared with a net profit of RM28.94 million a year ago.

However, revenue for 4QFY14 rose 56.3% to RM525.44 million from RM336.17 million a year ago. Loss per share was 0.5 sen compared with an earnings per share of 28.9 sen in 4QFY13.

MSC attributed the revenue growth in 4QFY14 to higher sales quantity of refined tin. Despite the increase in revenue, profit before exceptional items was however lower, mainly due to the weakening of tin in 4QFY14.

In a statement today, the group expects market conditions to remain challenging as the global commodity and resource sectors continue to be depressed, thus resulting in lower commodity and metal prices including tin.

“Given the current environment, we will focus our efforts on cost and operational efficiency in 2015. Following the completion of the disposal of Indonesia subsidiaries last year, the group anticipates an improvement in the overall financial results in 2015 with positive contribution from operations of the Butterworth International Smelter and the Rahman Hydraulic Tin mine,” it added.

MSC shares closed up 1.07% at RM2.83 today, bringing a market capitalisation of RM283 million.

(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.)