The largest integrated aluminium producer in South East Asia, Press Metal Aluminium Holdings Bhd reported a significant 31.4 per cent jump in net profit for the third quarter that ended Sept 30, 2024, reaching RM402.3 million, up from RM306.1 million in the same period last year. The robust performance was attributed to higher profit contributions from associated companies and rising aluminium prices.
For the nine-month period ended Sept 30, 2024 (9MFY2024), Press Metal recorded a net profit of RM1.32 billion against RM893.88 million previously, while revenue rose 10.5 per cent to RM11.35 billion from RM10.27 billion a year earlier. This was mainly due to the improved metal price, stronger US dollar and higher quantity delivered compared to 9MFY2023.
Despite improvements at the topline level, Press Metal’s performance in 3QFY2024 was hampered by higher other operating expenses, which surged 820.9 per cent year-on-year to RM102.21 million from RM11.1 million.
The much higher other operating expenses were brought about by the writing off of RM130 million in the net book value of its assets in the Samalaju Industrial Park due to a fire that occurred at its Phase 3 smelter there on Sept 9, 2024. As a result, this will reduce the company’s annual smelting capacity by an estimated 3 per cent to 4 per cent for the full year.
In light of its strong financial performance, Press Metal has declared a third interim dividend of 1.75 sen per share, payable on Dec 31, 2024. The company remains optimistic about sustaining its growth momentum amid favourable market conditions and continued demand for aluminium products.
This strong showing underscores Press Metal’s strategic positioning in the aluminium industry and its ability to leverage market dynamics for sustained profitability.
Tan Sri Paul Koon, Group CEO of Press Metal Bhd, stated, “The group’s financial performance for the quarter was impacted by the sharp US dollar depreciation over a short period, resulting in notable foreign exchange losses on trade receivables and cash assets."
“However, excluding this impact, our underlying performance — bolstered by forward-selling strategies and increased volumes of value-added products — would have demonstrated even stronger results."
Press Metal is steadfast in its pursuit of growth despite ongoing macroeconomic challenges. A key driver of this growth in the coming years will be the expansion of our upstream operations, particularly through strategic investments in alumina refineries, including PT Bintan Alumina Indonesia and PT Kalimantan Alumina Nusantara in Indonesia.
“Securing alumina assets is crucial for ensuring the long-term viability of an integrated aluminium smelter,” said Koon.
In a recent interview with Dr Yanchen Wang, Managing Director, SMM (Shanghai Metals Market) GLOBAL UK Ltd. AL Circle asked, "What are the current trends in the aluminium market in Asia, and how are they impacting global dynamics?"
Dr Yanchen Wang said, "The emerging economies in Asia, especially India and Southeast Asia, are becoming the new manufacturing hubs in the world, and they have shown strong primary aluminium demand growth in the last several years. The promising demand forecast in the region has driven more investment across the aluminium value chain. Local governments have also adopted some supporting policies to encourage investors to produce more value-added products rather than export raw materials. SMM expects Asia ex. China will produce over 17.1 million tonnes of primary aluminium in 2030, nearly 4.0 million tonnes higher than the output in 2024, which is the largest growth in the world."
For a comprehensive understanding of Dr Yanchen Wang's insights on various aspects of the Asian aluminium industry's dynamics and its impact on the global aluminium market, please refer to the full interview here.
Image credit: Press Metal
Responses
