RHB Investment Bank Bhd (RHB Research) reportedly expects that Press Metal Aluminium Holdings Bhd is projected to post a higher net profit for the second quarter (Q2) of 2025, supported by lower alumina prices. The core earnings are expected to grow Q-o-Q to between RM480 million and RM520 million, though this remains slightly below its earlier projections. During Q1 2025, the company's revenue stood at RM 3,897,248 million.
If we compare Y-o-Y, during Q2 2024, Press Metal's revenue closed at RM 3,954,884, representing a significant boost during Q2 2025.
The improvement is attributed to the decline in alumina prices to USD 350 per tonne, which has reduced its alumina-to-aluminium cost ratio to 14 per cent, compared to the three-year historical average of 18 per cent.
"However, this may be offset by the lower Q2 2025 London Metal Exchange(LME) price of US$2,446 per tonne and the Main Japanese Port or MJP premium of US$127 per tonne. Year-on-year (YoY), we expect to see somewhat mixed earnings, as lower alumina costs (19 per cent YoY) would be offset by softer LME and higher carbon anode prices," RHB said.
RHB Research noted that although the recent 90-day postponement of US tariff escalation against China does not directly affect Press Metal, it is expected to ease short-term downside risks for China's economy and industrial demand. Given that China accounts for 55–60 per cent of global aluminium consumption, the delay is likely to provide support for LME prices in the near term.
Also Read: Press Metal is set to grow in 2025 buoyed by demand recovery from China and alumina supply ease
RHB Research anticipates aluminium prices to remain relatively stable for the remainder of 2025, supported by easing geopolitical uncertainties. The firm has reiterated its "Buy" recommendation on Press Metal, revising its target price to RM6.26 from RM6.33.
"The tariff delay may result in a stronger ringgit, which is a slight negative, in our view, as over 90 per cent of Press Metal products are exported. Based on our sensitivity analysis, a two per cent appreciation in the ringgit could lower earnings by an estimated five per cent, assuming no hedging is done," added RHB
"All in, we cut financial years 2025 to 2027 earnings by 11 per cent, nine per cent and 11 per cent after accounting for FX assumptions and depreciation rates as well as tweaking alumina cost assumptions slightly by three per cent, to be more conservative.".
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