KUALA LUMPUR (March 4): Malaysia Smelting Corp Bhd (KL:MSC) has proposed a bonus share issuance on a one-for-one basis — meaning one bonus share for every existing share held — to reward shareholders and improve the trading liquidity of its shares.

This will double the tin miner and metal producer's share base to 840 million shares from 420 million shares, its bourse filing on Tuesday showed.

The last time MSC undertook a bonus issue was in the third quarter of 2018, also on a one-for-one basis. Right before that bonus issuance, it conducted a one-to-two share split, which involved dividing every existing share into two shares. At the end of 2018, the stock was trading at 53.9 sen, as opposed to its closing price of RM2.15 on Tuesday.

Once issued, the new bonus shares will be listed on both Bursa Malaysia Securities Bhd and the Singapore Exchange Securities Trading Ltd (SGX), where MSC is primarily and secondarily listed, respectively, MSC's bourse filing showed.

For illustration, post-bonus issuance, the price of MSC shares is expected to be RM1.1274, based on the five-day volume-weighted average price of MSC shares up to Feb 21, 2025.

Save for the dilution in earnings per share, the proposed bonus issue is not expected to have any material effect on the group’s earnings for the financial year ending Dec 31, 2025.

Subject to approval from Bursa Securities and shareholders, the proposed bonus issue is expected to be completed in the third quarter of 2025. UOB Kay Hian Securities is the adviser for the bonus issue.

Last Thursday, MSC declared a final dividend of seven sen per share after posting an over-threefold surge in net profit for its fourth quarter ended Dec 31, 2024 (4QFY2024), thanks to higher tin prices. The final dividend bumps up its total dividend payout to 31 sen per share for FY2024, more than double its 14 sen payout for FY2023.

The group's net profit for 4QFY2024 swelled 222% to RM30.18 million from RM9.37 million in 4QFY2023, while revenue rose 10.8% to RM448.45 million from RM404.63 million, lifted by higher tin prices as well as higher sales of refined tin derived from processed tin intermediaries.

Its annual net profit, however, slipped 6.6% to RM79.42 million from RM85.05 million in FY2023, though annual revenue grew nearly 18% to RM1.69 billion from RM1.44 billion. The annual earnings were largely dragged down by reduced contribution from its tin smelting segment, which posted a 29% drop in profit before tax due to lower incoming feed because of China’s accumulation and stockpiling of tin ore.

At its latest share price of RM2.15, down four sen from the previous day, MSC has a market capitalisation of RM903 million.

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Malaysia Smelting Corp proposes seven sen dividend as strong tin prices lift 4Q profit by threefold
MSC proposes two-for-one share split, one-for-one bonus issue