KUALA LUMPUR: Malaysia Steel Works (KL) Bhd (Masteel), whose external auditors had issued a qualified opinion on the assessment of the company’s numbers for the financial year ended Dec 31, 2014 (FY14), swung to a first quarter (1Q) net loss on lower sales volume and margin.
It reported a net loss of RM10.71 million or 4.53 sen loss per share for the three months ended March 31, 2015 compared with a net profit of RM7.28 million or 3.28 sen a year ago. Revenue for the quarter was down 4% at RM325.4 million, from RM337.68 million in 1QFY14.
It proposed a final dividend of 1.3% per share for FY14, subject to shareholders’ approval at the forthcoming annual general meeting.
In a filing with Bursa Malaysia yesterday, Masteel expects the remainder of its FY15 to be challenging due to the large overhang of cheap imported steel products delivered in the first half of FY15, which will weigh on local steel prices.
It also cited the goods and services tax implementation and the Hari Raya holidays dampening domestic demand for steel. The rise in natural gas prices and weak ringgit have also upped its production cost, it said.
It is now focusing on completing its new 200,000 tonnes per year premium steel bar rolling mill at Bukit Rajah, Klang, and expects the plant to generate significant contribution to its bottom line once fully commissioned by 2016.
On June 19, Nexia SSY Chartered Accountants had raised concerns over Masteel’s sales transactions involving some RM287 million, as it was concerned about the deals with the customers involved.
Last month, Bursa rejected Masteel’s application to extend the deadline to submit its financial results as its prevailing issues were all within its “reasonable control”.
Masteel’s annual audited accounts for FY14 were due on April 30, while its 2014 annual report and 1QFY15 results were due at end-May. Masteel shares have been suspended since May 12 until it has issued all the required disclosures to Bursa. It last traded at 62 sen.
This article first appeared in The Edge Financial Daily, on July 3, 2015.