KUCHING: Press Metal Aluminium Holdings Bhd group net profit has dropped to about RM1.21 billion for financial year to Dec 31, 2023 (FY2023) from about RM1.41 billion in FY2022 due to the softening of the metal price. The lower earnings were in line with drop in group revenue to RM13.8 billion from RM15.68 billion.
Earnings per share decreased to 14.74sen from 17.16sen. The company has declared higher dividends of 7sen for FY2023 as compared to 6.75sen in FY2022. In 4Q2023, Press Metal reported better earnings, with group net profit grew to RM320.5 million (4Q2022:RM260.8 million) despite a slip in group revenue to RM3.53 billion (RM3.91 billion).
Press Metal, which owns and operates aluminium smelting plants in Bintulu and Mukah, attributed the revenue decline by RM376.8 million (9.6 pct) in the current quarter under review mainly to lower metal price.
“Despite lower revenue generated, the group profit before tax (PBT) increased from RM327.43 million in 4Q2022 to RM423.73 million in 4Q2023, representing an increase of RM96.3 million or 29.4 pct. The higher PBT was mainly due to improved profit margin arising from the lower raw materials costs coupled with the higher profit contribution from its associates in 4Q2023,” said the company in explanatory notes to its financial results.
The group delivered improved results in 4Q2023 as compared to revenue of RM403.4 million recorded in 3Q2023 as a result of improved realised metal price in the current quarter. Press Metal group chief executive officer (CEO) Tan Sri Paul Koon said in 2023, the average market price for aluminium witnessed a decline as compared to 2022 primarily due to market uncertainties arising from high inflation and subdued global economic activities.
“It was a year of consolidation and destocking caused by slower demand. Nevertheless, a gradual economic recovery is anticipated to commence this year in view of the expectation of a pause in US rate hikes and the beginning of rates cuts,” he added in a press statement. Koon said the group is proactively strengthening its position by expanding valueadded products and extrusion capacity.
“The new landscape presented by recently developed global trade rules arising from geopolitical and trade tensions are also an opportunity for us to strategically penetrate new markets. “We maintain a cautiously optimistic outlook on aluminium demand for 2024, supported by a slow growth projection in aluminium dynamics at this juncture. “The surge in capital investments in green sectors and the shift towards low-carbon input metals present more opportunities for sustainable aluminium producers.
This trend is expected to elevate demand in burgeoning sectors, mitigating the decline in traditional industries like construction and real estate.
“As a key player in Southeast Asia, Press Metal stands to benefit from the potential trend of manufacturing relocation to the region. With expanded capacity, economies of scale and a commitment to financial discipline, we have fortified our position to capitalise on the industry’s changing dynamics to deliver long-term value and sustainable performance,” he added. Press Metal group has a smelting capacity of 1.08 million tonnes and an extrusion capacity of 210,000 tonnes per annum, making it the largest integrated aluminium producer in Southeast Asia.
