(Feb 28): Press Metal Aluminium Bhd's fourth quarter net profit rose 22.89% to RM320.46 million from RM260.78 million a year earlier, due to improved profit margins arising from lower raw material prices and higher profit contribution from associates.
Earnings per share for the quarter ended Dec 31, 2023 (4QFY2023) increased to 3.89 sen from 3.16 sen previously, Southeast Asia's largest aluminium smelter’s bourse filing showed.
Quarterly revenue, however, fell 9.64% to RM3.53 billion from RM3.91 billion in 4QFY2022, due to lower metal prices.
The group declared a fourth interim dividend of 1.75 sen per share payable on March 29. This brings the total dividend declared for FY2023 to seven sen, up from 6.75 sen in FY2022.
Full-year profit dropped 13.68% to RM1.21 billion from RM1.41 billion in FY2022 as revenue fell 12% to RM13.8 billion from RM15.68 billion amid a softening of metal prices.
In a separate statement, Press Metal group chief executive officer Tan Sri Paul Koon said 2023 was a year of consolidation and destocking caused by slower demand.
“In 2023, average market price for aluminium witnessed a decline compared to the preceding year, primarily due to market uncertainties arising from high inflation and subdued global economic activities,” said Koon
Nevertheless, Koon said a gradual economic recovery is anticipated to commence in 2024 in view of the expectation of a pause in US rate hikes and the beginning of rate cuts.
He said the group is proactively strengthening its position by expanding value-added products and extrusion capacity.
“The new landscape presented by recently developed global trade rules arising from geopolitical and trade tensions is 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 supply dynamics at this juncture,” he added.
On top of that, Koon said 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.
Meanwhile, as a key player in Southeast Asia, Koon said 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.
Shares of Press Metal, which are down by about 10% in the past year, closed four sen or 0.9% lower at RM4.65 on Wednesday, giving the group a market capitalisation of RM38.31 billion.