Press Metal reports jump in Q1 2017 earnings driven by higher output and metal prices

<p>Press Metal Bhd, reported a 57% jump in both revenue and earnings in Q1 2017 driven by higher output coupled with improved metal prices. The company ramped up its aluminium smelting capacity in mid-2016 in order to increase its sales volume.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/press%20metal2.JPG" alt="News" width="517" height="226" /></p> <p>The country&rsquo;s largest aluminium smelter announced earnings of RM148.05mil and revenue of RM2.02bil in Q1 2017 ended March 31. The quarterly earnings were higher than the company&rsquo;s average annual earnings in last five years.</p> <p>In May 2016, Press Metal completed the production ramp-up of its Samalaju Phase 2 smelter in Sarawak, doubling its production capacity to 640,000 tonnes per year and this turned out to be the biggest performance booster for the company in Q1 2017.</p> <p>According to its latest annual report, currently, Press Metal Bhd has the largest aluminium smelting capacity in South-East Asia at 760,000 tpy.</p> <p>The board has approved a first interim dividend of 1.50 sen per share for the current financial year compared with the last dividend of 3 sen. The lower dividend was due to a corporate exercise involving a 1-into-2 share split and a bonus issue completed in November last year.</p> <p>Press Metal is cautiously optimistic about the prospect in the current year, as its three smelters of the company have been running at their designed capacity and the company has been making an effort to focus more into value-added products.</p> <p>&ldquo;The increase in aluminium price was mainly due to the Chinese government&rsquo;s great concern of its environment and has launched (moves) to reduce the capacity of aluminium production in the country. As such, the market is expecting that the demand and supply for this year will tilt towards a deficit situation,&rdquo; a statement from Press Metal said.</p> <p>{googleAdsense}</p> <p>PMB Technology Bhd, Press Metal&rsquo;s 27.7%-owned affiliate company that makes aluminium products like curtain walls and shuttering, reported a lower net profit of RM2.35mil in Q1 2017 compared to RM2.39mil in Q1 2016, however, revenue increased 36% to RM100.83mil. PMB Technology attributed the lower profit to the increase in aluminium price, which &ldquo;was not fully passed on to the customers&rdquo; during Q1 2017.</p> <p>Aluminium prices had risen 11% to US$1,930 per tonne in 2017. Aluminium premium had also increased from US$95 per tonne in Q4 to US$126 per tonne in Q2 2017.</p>