MSC posts RM14.29m net profit for Q3, proposes 17 sen special dividend

PETALING JAYA: Tin miner and metal producer Malaysia Smelting Corporation Bhd’s (MSC) net profit for the third quarter ended Sept 30, 2024 (Q3’24) increased 20.88% to RM14.29 million from RM11.82 million in Q3’23.

Revenue for the quarter under review increased 29.14% to RM470.05 million from RM364.02 million in Q3’23.

The growth was driven by higher average tin prices of RM141,500 per tonne and increased sales of refined tin.

In line with favourable tin prices, the group’s tin mining segment recorded a 26.1% year-on-year (y-o-y) increase in net profit to RM22.5 million during the quarter from RM17.9 million a year ago.

Meanwhile, the tin smelting arm was affected by foreign exchange losses resulting from the ringgit’s appreciation against the US dollar between August and September 2024, compounded by lower smelting performance. This resulted in a net loss of RM10.3 million during the quarter, against a net loss of RM2.7 million in Q3’23.

For the nine months of FY24 (9M’24), MSC’s revenue grew by 20.6% y-o-y to RM1.24 billion, from RM1.03 billion in 9M’23, fuelled by more favourable tin prices of RM140,100 per tonne and higher sales volume of refined tin.

The tin mining segment posted a higher net profit of RM61.7 million on the back of higher tin prices.

Nonetheless, the tin smelting division recorded a net profit of RM4.3 million, impacted by various factors, including lower incoming feed for smelting, reduced sales of refined tin from processed tin intermediates, and foreign exchange losses.

As a result, the group’s net profit contracted to RM49.2 million in 9M’24, against RM75.7 million in the prior year.

MSC group CEO Datuk Dr Patrick Yong said that despite the challenges posed by the global economic environment, the company remains steadfast in building a more resilient business through operational improvements and strategic investments in mining and smelting businesses.

“For our tin smelting division, we are working to address these challenges and are confident in our long-term strategy. Moreover, the recent conclusion of the US 2024 presidential election and the strengthening of the US dollar against the ringgit provide a more stable backdrop for our operations.”
For the tin smelting business, Yong said, the group is on track to phase out the old smelting plant at Butterworth, Penang, which is on track for full closure by 2025.

“We expect to benefit from an approximate 30% in cost savings from the planned closure and from the efficient Top Submerged Lance furnace technology in the Pulau Indah smelting facility, which will lower operational and manpower costs and reduce our overall carbon footprint.

“For our tin mining segment, we will continue to focus on improving and increasing our daily mining output and enhancing our overall mining productivity. This includes expanding our mining activities and mine resources, adopting new cost-effective mining methodology and participating in new mining joint ventures,“ he said.

For Q3’24, the board has proposed a second interim single-tier special dividend of 17 sen per share for a total dividend payout of RM71.4 million. This follows the first interim single-tier dividend of 7 sen per share declared on Sept 25, which amounts to a dividend payout of RM29.4 million.