KUALA LUMPUR (Nov 25): Malaysia Steel Works (KL) Bhd (Masteel) posted its third straight quarterly profit in the third quarter ended Sept 30, 2016 (3QFY16), as it benefited from higher margins on lower operating cost.

It posted a net profit of RM1.24 million or 0.51 sen a share in 3QFY16 compared with a net loss of RM24.14 million or 10.04 sen loss per share a year ago.

Revenue, however, fell 8.6% to RM275.45 million in 3QFY16 from RM301.44 million in 3QFY15 on lower sales volume.

For the nine months period (9MFY16), it posted a net profit of RM17 million compared with a net loss of RM49.01 million in 9MFY15 as revenue slipped 0.8% to RM861.81 million from RM869.03 million in 9MFY15.

On prospects, Masteel said due to various favorable policy-driven factors emanating from China, such as steel plant consolidation, robust construction activities, reducing steel inventory and rising production costs, steel prices have seen a steady increase.

It said recent news on the election agenda of US President-elect Donald Trump, who had promised to spend up to US$550 billion on a stimulus plan, is estimated to increase steel demand in the US by 22 million tonnes per year for the next five years. This bodes well for the global steel market.

"Domestic steel prices are also expected to continue to improve, underscored by the effects of the weaker ringgit and safeguard duty put in place since end-September, which will make imported steel products substantially more costly," it added.

"(As such,) Masteel is well poised to benefit from any opportunity due to the timely commissioning of its new rolling mill, improved steel-making technology and proximity to major markets," it said in a filing with Bursa Malaysia today.

Masteel shares closed 1.2% higher at 82 sen today, bringing a market capitalisation of RM201.09 million.