KUALA LUMPUR (Nov 27): Press Metal Bhd saw its net profit fall 64.3% to RM29.51 million or 2.27 sen a share in the third quarter ended Sept 30, 2015 (3QFY15) from RM82.65 million or 15.68 sen a share a year ago, due to the fact that profit margin from its extrusion products and trading activities were relatively lower than its smelting operations.

Revenue for 3QFY15 slipped 1.2% to RM1.02 billion from RM1.03 billion in 3QFY14, even though production from Samalaju smelting plant was significantly reduced after the fire incident on May 17.

"The major contributing factor to the marginal decline in revenue was due to the substantially weaker ringgit against the US dollar," Press Metal said in a filing with Bursa Malaysia yesterday.

"All of our smelting products sales are denominated in the greenback and thus, although our sales volume has reduced, our sales value in ringgit term did not drop as much.

"Also, higher revenue generated by the group’s extrusion division and trading activities taken by the Samalaju smelting plant in sourcing metal from the open market to fullfill its customers orders have also helped to mitigate the loss of production volume for the plant," the group added.

Press Metal also declared a third interim dividend of 1.5 sen per share for the financial year ending Dec 31, 2015 (FY15), payable on Dec 28.

For the cumulative nine months period (9MFY15), Press Metal reported a 43% decline in net profit to RM97.37 million from RM170.71 million in 9MFY14.

Revenue for 9MFY15, however, was up 3.2% to RM3.02 billion from RM2.93 billion a year ago.

On prospects, Press Metal said that the group has just commissioned its Phase 2 expansion of its Samalaju Smelting Plant, and the expansion will give the group higher economy of scale which should improve its overall production cost.

Press Metal shares closed up 4 sen, or 1.93% to RM2.11 yesterday, giving it a market capitalisation of RM2.74 billion.

(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.)