KUALA LUMPUR (Aug 6): Malaysia Smelting Corp Bhd (MSC) reported today that its net profit more than tripled in the second quarter ended June 30, 2021 (2QFY21) to RM2.93 million from RM894,000 in the same quarter last year, supported by higher tin prices and production despite wider losses in the smelting segment due to the full movement control order (FMCO).

Quarterly earnings per share rose to 0.7 sen, from 0.2 sen in the same quarter last year, the group’s filing said.

On the weaker smelting segment performance, MSC said the inefficiency of aged equipment at the Butterworth facility has also affected the performance of MSC with lower furnace days and lower recovery of tin.

Revenue in the quarter jumped 126.15% to RM327.12 million, from RM144.65 million, as average tin prices near doubled while sales volume of refined tin rose.

For the six months ended June 30, 2021 (1HFY21), MSC returned to the black with a net profit of RM25.05 million or 6.3 sen per share, from a net loss of RM12.29 million or 3.1 sen per share in 1HFY20.

The improved results came as the group recorded lower losses in its tin smelting segment, largely due to reversal of inventories written down of RM24 million in 1HFY21 as opposed to RM14 million in 1HFY20. Additionally, the tin mining segment's profit rose more than five-fold, again on higher tin prices and higher production.

Revenue, meanwhile, climbed 72.31% to RM603.02 million from RM349.96 million.

“This was mainly due to higher average tin prices for 1HFY21 of RM111,450 as compared with 1HFY20's RM67,696 per metric tonne and higher sales quantity of refined tin in 1HFY21,” it said.

“Tin prices continue to trend upwards, lifted by continued demand for tin solder in consumer electronics, and supply disruptions due to lockdowns in tin producing countries around the world (Malaysia included), voluntary production cuts in Brazil and Indonesia, and political turmoil in Myanmar.

“The outlook for tin demand is promising from its continued use in semiconductors, electronics, home appliances, photovoltaics, automotive, and lithium-ion batteries,” MSC said.

“Our progress at the new Pulau Indah smelter is still on track for full commissioning by end-2021/early-2022, as we gradually ramp up production to 100%,” MSC group chief executive officer Datuk Dr Patrick Yong said in a separate statement.

“The Top Submerged Lance (TSL) furnace at the Pulau Indah facility will enhance our cost and operational efficiencies, with higher extractive yields and smaller ecological footprint,” Yong said.

“As for our tin mining activities, we remain focused on enhancing the overall mining productivity at the Rahman Hydraulic Tin mine in Klian Intan, in the state of Perak in addition to exploring new tin deposits. We are also exploring potential joint venture arrangements to enhance our mining activities,” he added.

Shares of MSC rose six sen or 2.9% to RM2.13, bringing its market capitalisation of RM894.6 million.