CSC Steel’s 4Q net profit surges more than three times to RM21.43m

Posted on 23 February 2021

CSC Steel Holdings Bhd’s net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) jumped more than three times to RM21.43 million, from RM7.07 million a year ago, on higher revenue, better margin and lower cost.

Its quarterly revenue also rose 9.91% to RM367.53 million, from RM334.39 million a year ago, its filing to Bursa Malaysia showed.

The group said the growth in revenue was primarily due to an increase in sales volume and selling prices of its products.

Meanwhile, the improved profit was mainly due to a better margin, favourable product mix, and lower cost amidst higher production utilisation.

The group proposed a final single tier dividend of seven sen per share for the financial year ended Dec 31, 2020 (FY20).

The proposed entitlement and payment dates for the final dividend will be determined at a later date and announced accordingly.

For FY20, the group’s net profit increased by 6.31% to RM37 million, from RM34.8 million a year earlier, due mainly to better margin contributed by coated products, lower selling and marketing expenditures as the business focus more on the domestic market, and a reversal of inventory write-off.

Its full year revenue, however, fell 20.76% to RM1.08 billion, from RM1.36 billion a year earlier, due mainly to the severe interruption of business operation during the first phase of movement control order (MCO) from March to May 2020.

For the first quarter of 2021, the group said, the surge in global steel price will provide price support globally, projecting a further boost in the steel market sentiments towards positive growth.

It also said the prospect of the domestic steel market in the first quarter of 2021 appears to be favourable with the government initiatives to support the business environment while managing the third wave of pandemic transmission.

“The prolonged low-interest-rate environment would also help the domestic real estate and durable goods markets in maintaining its growth.

“Although the MCO 2.0 might slow down the steel industry activities, the government’s dynamic responses and supports are expected to help the steel industry to survive during this challenging period,” it said.

CSC Steel shares rose three sen or 2.31% to close at RM1.33 today, valuing the company at RM491.18 million.

Source : The Edge