KUCHING: Firm metallic silicon prices has driven PMB Technology Bhd’s group net profit sharply higher to about RM35.2 million in second quarter ended June 30, 2022 (Q22022) from RM11.6 million in Q22021.
The earnings growth is in line with expanded group revenue to RM260.2 million from RM178.3 million or an increase of RM81.9 million or 46 per cent.
The company’s earnings per share rose to 3.2 sen from 1.12 sen previously.
PMB Tech, an associate of Press Metal Aluminium Holdings Bhd, owns and operates metallic silicon manufacturing plants in Samalaju Industrial Park in Bintulu, with annual production capacity of 72,000 tonnes.
In the current quarter under review, PMB Technology derived its revenue from manufacturing and trading segment (RM182.1 million) and construction and fabrication segment (RM78.9 million). The segments recorded profit of about RM46 million and RM1.29 million respectively.
During the January-June 30, 2022 period (6M2022), PMB Technology saw its group net profit soared to about RM90 million from RM18.2 million in Q22021 as revenue jumped by 65 per cent to RM562.2 million from RM340.1 million.
“In tandem with higher revenue, the group’s profit before tax increased sharply from RM24.3 million to RM111.4 million. The increase was mainly due to the improved contribution from the metallic silicon plant during 6M/22,” the company said in explanatory notes to its financial results.
In 6M2022, the manufacturing & trading segment revenue surged by 79 per cent to RM420.6 million mainly contributed by higher metallic silicon price.
“Segment profit increased sharply by RM87.4 million from RM31.2 million to RM118.6 million on the back of higher metallic silicon price after offsetting higher raw material costs and operating expenses during 6M/22.”
The construction and fabrication segment recorded a 34 per cent increase in revenue to RM141.6 million from RM105.5 million (6M2021) and pushed its segment profit to RM3.3 million from RM3 million previously.
However, the Q22022 financial results were weaker compared to Q12022 when group revenue stood at RM302 million (Q22022: RM260.2 million or down 14 per cent). Likewise, pre-tax profit was cut by 38 per cent from RM68.6 million (Q22021) to RM42.8 million. The drop was due to lower revenue and higher operating costs.
Going forward, PMB Technology said near term outlook for silicon metal on the demand side from the chemical and automotive sectors has been negatively impacted by fears of a global slowdown in economic activity and growing inflationary pressures.
“The global financial market and supply chain remained highly volatile largely reflected the continued strengthening of the US dollar following aggressive US monetary policy tightening, increased investors’ risk aversion due to the weaker-than-expected global growth outlook and the spillovers from the Russian-Ukraine military conflict,” it said.
On the supply side of silicon metal, PMB Technology said the recent power rationing and COVID-19 outbreak in two of China’s major silicon metal producing regions along with the labour strike in several silicon metal production plants in Europe are creating, in the short term at least, some concerns of supply tightness.
However, it said the full impact is yet to be ascertained and will depend on the severity and duration of these events.
“Demand from the solar photovoltaic (PV) sector is expected to remain strong as major nations ramp up climate related spending that incentivises investment in the expansion of renewable energy generation.
“Year-on-year global energy transition spending continues to grow at a healthy rate which is clear indication that most nations remain committed to meeting their climate targets,” added PMB Technology.
