Maybank Investment estimates Press Metal’s Q1 FY2024 net profit to grow up to RM365 million

Press Metal Aluminium Holdings Berhad, a Malaysian-based integrated producer of aluminium, is likely to register a higher net profit for the first quarter (Q1) of 2024, in support of higher spot prices of the metal, notwithstanding volatile production costs.

Maybank Investment Bank Bhd (MaybankIB) estimates Press Metal's core earnings for Q1 2024 between RM315 million and RM365 million. In the previous quarter (Q4 FY2023), the company's core earnings totalled RM328.4 million.

The bank has projected this increased quarter-on-quarter earnings based on the uptrend of the aluminium spot price on the London Metal Exchange at the average of US$2,243 per tonne in Q1 2024.

"Our 1Q24E core net profit estimate implies that PMETAL's earnings would come in at 22-25 per cent of our revised financial year 2024 (FY24) full-year forecast and 21-24 per cent of consensus's full-year estimates of RM1,510 million," the bank said in a note.

MaybankIB has revised Press Metal's FY2024 to FY2026 net profit forecasts by reducing them by 8 per cent/7 per cent/7 per cent, respectively, considering higher operational expenses and logistics costs. Also, the bank has kept its expectation for the spot aluminium price subdued for the mid-term.

In Q4 FY2023, Press Metal's revenue stood at RM3.53 billion compared to RM3.91 billion a year ago, attributed to lower metal prices. But profit after tax and minority interests increased by 22.9 million for the same period. The company's full-year revenue was RM13.8 billion, down by 8 per cent from RM15 billion in FY2022.