MALAYSIA STEEL WORKS (KL) BHD (Company No. 7878

MALAYSIA STEEL WORKS (KL) BHD
(Company No. 7878-V)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD ENDED 31ST DECEMBER 2014
INDIVIDUAL PERIOD
CURRENT
PRECEDING YEAR
YEAR
CORRESPONDING
QUARTER
QUARTER
31/12/14
31/12/13
RM'000
RM'000
Revenue
Operating expenses
Other expenses
Other income
Interest income
Finance cost
Share of results of associated
company
Profit before tax
Taxation
Profit for the period
CUMULATIVE PERIOD
CURRENT
PRECEDING YEAR
YEAR
CORRESPONDING
TO DATE
PERIOD TO DATE
31/12/14
31/12/13
RM'000
RM'000
392,169
351,961
1,451,933
1,375,441
(372,325)
(345,050)
(1,399,209)
(1,333,682)
(8,534)
44
(162)
87
(10,494)
-
2,497
2,242
157
172
(5,001)
(2,743)
(16,395)
(15,140)
(167)
(46)
(381)
(76)
6,186
(1,671)
4,047
(421)
28,108
28,957
(12,311)
(1,943)
4,515
3,626
15,797
27,014
Other Comprehensive Income
-
-
-
-
Total Comprehensive Income
4,515
3,626
15,797
27,014
Profit and Total
Comprehensive Income
attributable to:
Equity holders of the Company
4,515
3,626
15,797
27,014
Profit for the period
4,515
3,626
15,797
27,014
1.99
1.77
1.66
1.48
6.98
6.19
12.38
11.01
Earnings per share (sen)
- Basic
- Diluted
The Unaudited Condensed Statement of Comprehensive Income should be read in conjunction with the Annual
Financial Statement for the year ended 31st December 2013 and accompanying explanatory notes attached to the
interim financial statements.
MALAYSIA STEEL WORKS (KL) BHD
(Company No. 7878-V)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31ST DECEMBER 2014
31/12/14
RM'000
ASSETS
Non-Current Assets
Property, Plant & Equipment
Investment in Associate company
Current Assets
Stocks
Debtors
Taxation recoverables
Short term deposit
Cash & bank balances
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity holders
Share capital
Share premium
Treasury shares
Warrants reserves
Retained profits
Total Equity
Non-Current Liabilities
Long term borrowings
Deferred tax liabilities
Current Liabilities
Creditors
Short term borrowings
Total liabilities
TOTAL EQUITY AND LIABILITIES
Net Assets per share (RM)
31/12/13
RM'000
536,719
8,869
545,588
482,307
8,732
491,039
165,153
331,932
1,775
10,959
31,217
541,036
220,618
239,446
2,540
14,418
45,978
523,000
1,086,624
1,014,039
118,350
38,354
(349)
32,929
387,527
576,811
110,989
35,851
(438)
38,523
368,358
553,283
34,548
9,545
44,093
25,205
25,205
186,995
278,725
465,720
171,549
264,002
435,551
509,813
460,756
1,086,624
1,014,039
2.44
2.50
The Unaudited Condensed Statement of Financial Position should be read in conjunction with
the Annual Financial Statements for the year ended 31st December 2013 and accompanying
explanatory notes attached to the interim financial statements.
MALAYSIA STEEL WORKS (KL) BHD
(Company No. 7878-V)
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE FINANCIAL PERIOD ENDED 31ST DECEMBER 2014
Current year
01/01/14
to 31/12/14
RM'000
Profit before tax
Adjustment for:
Depreciation of property, plant and equipment
Interest expense
Impairment of inventories
Gain on disposal of property, plant and equipment
Share of loss of associate
Others
Operating profit before changes in working capital
Changes in working capital
Net change in inventories
Net change in receivables
Net change in payables
Cash generated from operations
Interest paid
Income tax paid
Net cash inflow from operating activities
Investing activities
Purchase of property, plant and equipment
Investment in Associate
Interest received
Proceed on disposal
Net cash outflow in investing activities
Financing activities
Bank borrowings
Dividend paid
Share buy back
Shares subscribed by warrant holder
Finance lease interest paid
Net cash inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the financial year
1
1
Preceding Year
01/01/13
to 31/12/13
RM'000
28,108
28,957
22,399
16,125
208
(38)
381
7,045
74,228
21,638
14,968
(18)
76
3,849
69,470
55,257
(92,201)
7,934
45,218
(15,852)
(2,001)
27,365
(39,560)
47,085
(16,931)
60,064
(14,716)
(639)
44,709
(76,811)
(520)
157
173
(77,001)
(43,441)
(800)
172
18
(44,051)
19,908
(2,222)
(22)
9,864
(273)
27,255
9,791
(2,176)
(111)
2,681
(424)
9,761
(22,381)
10,419
58,396
47,977
36,015
58,396
10,959
31,217
(6,161)
36,015
14,418
45,978
(2,000)
58,396
Cash and cash equivalents at end of the financial year comprise :
Short term deposit
Cash and bank balances
Bank overdraft
The Unaudited Condensed Statement of Cash Flow should be read in conjunction with the Annual Financial Statements
for the year ended 31st December 2013 and accompanying explanatory notes attached to the interim financial statements.
MALAYSIA STEEL WORKS (KL) BHD
(Company No. 7878-V)
THE UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD ENDED 31ST DECEMBER 2014
Attributable to equity holders of the Company
Non-distributable
Distributable
Share
Capital
RM'000
Share
Premium
RM'000
Warrant
Reserves
RM'000
Revaluation
Reserves
RM'000
Retained
Profits
RM'000
Treasury
Shares
RM'000
Total
RM'000
12 months ended 31st December 2014
At 1st January 2014
Shares subscribed by warrant holder
110,989
35,851
38,523
-
368,358
7,361
2,503
(5,594)
-
5,594
Share buy-back
(438)
-
553,283
9,864
(22)
(22)
111
111
Treasury Share disposal
-
-
-
-
-
Dividend declared in respect of
financial year ended 31st December 2014
-
-
-
-
(2,222)
-
(2,222)
Total comprehensive income
-
-
-
-
15,797
-
15,797
118,350
38,354
32,929
-
387,527
(349)
576,811
108,988
33,650
40,044
-
343,520
(327)
525,875
2,001
2,201
(1,521)
-
-
Share buy-back
-
-
-
-
-
Dividend declared in respect of
financial year ended 31st December 2013
-
-
-
-
(2,176)
-
(2,176)
Total comprehensive income
-
-
-
-
27,014
-
27,014
35,851
38,523
-
368,358
At 31st December 2014
12 months ended 31st December 2013
At 1st January 2013, as previously stated
Shares subscribed by warrant holder
At 31st December 2013
110,989
The Unaudited Condensed Statement of Changes in Equity should be read in conjunction with the Annual Financial Statements
for the year ended 31st December 2013 and accompanying explanatory notes attached to the interim financial statements.
(111)
(438)
2,681
(111)
553,283
MALAYSIA STEEL WORKS (KL) BHD
(Company No. 7878-V)
EXPLANATORY NOTES PURSUANT TO THE MALAYSIAN FINANCIAL REPORTING
STANDARDS (“MFRS”) 134: INTERIM FINANCIAL REPORTING FOR THE QUARTER
ENDED 31st December 2014
A1.
Basis of Preparation
The interim financial statements are unaudited and have been prepared in accordance MFRS 134:
Interim Financial Reporting issued by Malaysian Accounting Standards Board (“MASB”),
International Accounting Standard (“IAS”) 134: Interim Financial Reporting issued by
International Accounting Standard Board (“IASB”) and paragraph 9.22 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).
The interim financial statements should be read in conjunction with the audited financial
statement for the year ended 31st December 2013, which were prepared under Malaysian
Financial Reporting Standards (“MFRSs”). These explanatory notes attached to the interim
financial statements provide an explanation of events and transactions that are significant to an
understanding of the changes in the financial position and performance of the Group since the
year ended 31st December 2013.
A2.
Accounting Policies and Methods of Computation
Adoption of Standards, Amendments and IC Interpretations
The Group has adopted the following Amendments to Standards, with a date of initial application
of 1st January 2014:Amendments to MFRS 10
Amendments to MFRS 12
Amendments to MFRS 127
Amendments to MFRS 132
Amendments to MFRS 136
Amendments to MFRS 139
Consolidated Financial Statements
Disclosure of Interests in Other Entities
Separate Financial Statements
Offsetting Financial Assets and Financial Liabilities
Recoverable Amount Disclosures for Non-Financial Assets
Novation of Derivatives and Continuation of Hedge Accounting
The adoption of the above pronouncements did not have any impact on the financial statements of
the Group.
Amendments to MFRSs issued but not yet effective
The following new MFRS and Amendment has been issued by MASB but are not yet effective,
and have yet to be adopted by the Group:
MFRS 9
Financial Instruments
Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions
The Group will adopt the above pronouncements when they become effective in the respective
financial periods. These pronouncements are not expected to have any effect to the financial
statements of the Group upon their initial application.
1
A3.
Qualification of Financial Statements
The financial statements for the financial year ended 31st December 2013 was not qualified.
A4.
Seasonal or Cyclical factors
The operations of the Company are subject to both cyclical factors in the construction industry as
well as festive seasons.
A5.
Extraordinary items
There are no extraordinary items for the financial period under review.
A6.
Changes in Estimates
There have been no changes in the estimates of amount for the period under review.
A7.
Debts and Equity Securities
There were no issuances, cancellation, repurchases, resale and repayment of debts and equity
securities for the current quarter under review, save as disclosed below.
A total of 2,000,000 ordinary shares were subscribed by a warrant holder on his entitlement at the
exercise price of RM0.67 per share on 29th October 2014 and 29th December 2014 respectively.
As at 31st December 2014, a total of 322,000 shares were held as treasury shares out of its total
issued share capital of 236,700,671 shares at an average price of RM1.008 per share. The share
buyback transactions were financed by internally generated funds.
A8.
Dividend
No dividend was paid by Company in the current quarter under review and financial year to date.
A9.
Segmental reporting
The Group is primarily organised in one business segment namely manufacturing of steel bars
and billets. The business segment analysed by geographical location of customers are as follows:
Current
Quarter ended
RM’000
Revenue
- Malaysia
- Outside Malaysia
2
Current Year
to-date ended
RM’000
387,020
5,149
1,409,990
41,943
392,169
1,451,933
A10.
Valuation
The valuations of the property, plant and equipment has been brought forward and was regarded
as deemed cost at the date of transition to MFRS. The relevant revaluation surplus was
recognized to the retained earnings.
A11.
Material subsequent events
There are no material subsequent events between the end of the current quarter under review and
the date of this report.
A12.
Changes in the composition of the Group
There was no change in the composition of the Group during the current quarter under review.
A13.
Capital commitments
31/12/14
RM’000
Property, plant and equipment
- Approved and contracted for
21,227
3
PART B:-
B1.
ADDITIONAL INFORMATION REQUIRED BY THE MAIN MARKET LISTING
REQUIREMENTS OF BURSA SECURITIES
Review of performance
The Group reported a profit before tax of RM6.19 million on the revenue of RM392.17 million
for the current quarter compared to a profit before tax of RM4.05 million on the revenue of
RM351.96 million for the previous year corresponding quarter. The increase in revenue in the
current quarter is mainly attributed to higher sales volume. The Company recorded a higher profit
mainly due to higher sales volume and higher margin in the current quarter.
For the year under review, the Company’s revenue increased by 5.8% to RM1.45 billion as
compared to RM1.37 billion for the previous financial year. This is mainly due to higher sales
volume recorded. The profit for the year decreased from RM28.9 million in the previous year to
RM28.1 million mainly due to the unrealised foreign exchange loss of RM7.5 million during the
year.
B2.
Comparisons with immediate preceding quarter’s results
The Group’s revenue for the current quarter recorded an increase of RM30.07 million to
RM392.17 million mainly due to higher sales volume. The Group recorded an increase in profit
before tax of RM6.19 million as compared to RM3.47 million achieved in the immediate
preceding quarter mainly due to higher margin in the current quarter.
B3.
Prospects
The Company is expected to increase its bar sales volume by 10% for the first half of the year and
upon the commissioning of its new rolling mill during the second quarter, for the second half the
year, it is anticipated to sell an additional 100,000 mt of high tensile steel bars.
The margin is expected to improve due to the following factors:
1) the continued decline in scrap prices.
2) the reduction in electricity tariff of 5.8% from March till June 2015.
3) higher levels of economies of scale due to higher volume of production .
4) the suspension of natural gas price revision by the Government.
5) due to the stabilizing international iron ore prices, the prices of Chinese steel imports are
expected to bottom out.
The Company is expected to perform well in the following quarters based on prevailing business
conditions.
The impending impositions of goods services tax (GST) on the Company’s products are not
expected to have any material impact on the sales volume of the Company.
B4.
Profit forecast
The disclosure requirements for explanatory notes are not applicable as no profit forecast was
published.
4
B5.
Profit before taxation
Current Quarter
Ended
RM'000
Current Year
To-date Ended
RM'000
Profit before taxation is arrived at after
charging/(crediting):
Unrealised foreign exchange(gain)/loss
Realised foreign exchange (gain)/loss
Provision/(Reversal) of doubtful debts
Provision for impairment of stock
Depreciation of property, plant
equipment
Interest expense
Interest income
B6.
and
8,171
364
(74)
208
5,634
7,512
546
(285)
208
22,399
4,944
(44)
16,125
(157)
Taxation
i) Taxation comprises:
Current Quarter
Ended
RM'000
Current Year
To-date Ended
RM'000
Malaysian income tax
Current year’s provision
Deferred tax liabilities
1,048
623
2,766
9,545
1,671
12,311
ii) Reconciliation of income tax expenses
Current Quarter
Ended
RM'000
Profit before taxation
Taxation at tax rate of 25%
Income not subject to tax
Utilization of unutilized reinvestment
allowance
Deferred tax liabilities
-current quarter
-previous quarters
Under provision in prior year
Others
5
Current Year
To-date Ended
RM'000
6,144
28,108
1,536
2,100
(2,631)
7,027
2,426
(7,113)
623
43
623
8,922
285
141
1,671
12,311
B7.
(a) Status of corporate proposals
i)
Head of Joint venture Agreement (“Proposed Joint-Venture”)
On 19th January 2011, the Board announced that the Company has entered into Head of Joint
Venture Agreement with KUB Malaysia Berhad (“KUB”), a company listed on the Main
Market of Bursa Malaysia Securities Berhad wherein the Company and KUB have agreed to
combine their capabilities and resources related to the objective stated herein and are
desirous to co-operate and collaborate with each other in the joint-venture company,
Metropolitan Commuter Network Sdn Bhd (“MCN”) to pursue the rail transit network
project in the Iskandar Malaysia.
MCN has submitted an updated proposal on 8th January 2015 to the Ministry of Transport.
According to Yang Berhormat Datuk Seri Liow Tiong Lai, the Transport Minister, his
Ministry will speed up the reviewing and updating process of the project and recommend its
re-tabling to the Economic Council by this year.
The Minister also indicated that the MCN’s proposed system compliments the ongoing
Gemas-Johor Bharu double tracking project, the KL-Singapore High Speed Rail, JohorWoodlands, Singapore Rapid Transit System (RTS) and the Bus Rapid Transit (BRT)
system for the economic corridor.
(b) Status of utilization of proceed raised
Not applicable
B8.
Borrowings
31/12/14
RM'000
Secured:
Short term borrowings
Long term borrowings
278,725
34,548
Total borrowings
313,273
The above borrowings are all denominated in Ringgit Malaysia.
B9.
Material litigations
There are no material litigations during the current period under review.
B10.
Dividend
No dividend has been proposed or declared by the Company during the current quarter under
review.
6
B11.
Earnings per share (“EPS”)
(a)
Basic earnings per share
The basic earnings per share of the Company is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average number of ordinary shares
in issue during the period.
Current
Quarter
Ended
Profit attributable to ordinary shareholders
(RM'000)
Weighted average number of ordinary shares
in issue ('000)
Basic Earnings Per Share (sen)
(b)
Current
Year To-date
Ended
4,515
15,797
226,367
226,367
1.99
6.98
Diluted earnings per share
For the purpose of calculating diluted earnings per share, the weighted average numbers
of shares in issue have been adjusted for the dilutive effects of all potential conversion of
any convertible securities issued during the period as set out below:
Current
Quarter
Ended
Profit attributable to ordinary shareholders
(RM'000)
Weighted average number of ordinary shares
in issue ('000)
Effects of dilution (‘000)
Adjusted weighted average number of
ordinary shares in issue and issuable ('000)
Diluted Earnings Per Share (sen)
7
Current
Year To-date
Ended
4,515
15,797
226,367
28,741
226,367
28,741
255,108
255,108
1.77
6.19
B12.
Realised and unrealised profits disclosure
The breakdown of retained profits of the Group as at the reporting date, into realised and unrealised
profits, pursuant to the directive, is as follows:
As at
31/12/14
RM’000
Total retained profits of the Company and its subsidiary :
- Realised
- Unrealised
Total share of accumulated losses from Associate :
- Realised
Total Group retained profits as per consolidated accounts
B13.
As at
31/12/13
RM’000
364,847
23,518
388,365
341,665
27,149
368,814
(838)
(456)
387,527
368,358
Authorisation for issue
The interim financial statements were authorised for issue by the Board of Directors in
accordance with a resolution of the Directors.
8
PRESS RELEASE
Masteel anticipates higher steel bar sales in
2015


Spurred by expanded capacity in mid-2015 and sustained
domestic demand
4Q14 net profit rose 24.5% to RM4.5 million, on revenue
growth of 11.4% to RM392.2 million
Petaling Jaya, Malaysia, 27 February 2015 – Integrated steel manufacturer
Malaysia Steel Works (KL) Bhd (Masteel, 马来西亚钢厂（吉隆坡）有限公司,
Bloomberg: MSW MK; Reuters: MSWK.KL) is anticipating steel bar sales to
increase in 2015, which would enhance the Group’s financial performance for the
current financial year ending 31 December 2015 (FY2015).
Demand for steel bars is expected to be underpinned by the robust domestic
construction industry, stemming from substantial investments into development
projects from both the public and private sectors.
“Our optimistic sales outlook of steel bars in 2015 is anchored by the expected
sturdy growth in the domestic construction industry. This is especially true
given the Government’s unchanged allocation of RM48.5 billion for major
infrastructure projects, such as new highways and the Mass Rapid Transit lines
under the revised national budget.
Furthermore, our new rolling mill is targeted to come on-stream in mid-2015,
immediately boosting our overall steel bar production capacity to 550,000 MT
per year, from 450,000 MT per year currently.
The anticipated sales growth, expanded production capacity, and declining
prices of our key raw material of scrap metal, should translate into better
financial performance for the Group in FY2015.”
Dato’ Sri Tai Hean Leng (拿督斯里戴贤龙)
Managing Director and CEO of Malaysia Steel Works (KL) Bhd
Masteel had invested RM100 million into a new rolling mill in Bukit Raja. With its
ongoing focus on improving operational efficiency, the new rolling mill is expected
to eventually increase the Group’s overall production capacity to 650,000 MT per
annum by 2016.
Page 1 of 3
Results for fourth quarter (4Q14) and full year ended 31 December 2014 (FY2014)
Masteel’s 4Q14 net profit leaped 24.5% to RM4.5 million from RM3.6 million
previously, on revenue growth of 11.4% to RM392.2 million from RM352.0 million
previously.
The strong performance was attributed to higher sales of steel bars and enhanced
manufacturing efficiency.
For FY2014, revenue rose 5.6% to RM1.5 billion from RM1.4 billion previously.
Group net profit was 41.5% lower at RM15.8 million in FY2014 from RM27.0 million
a year ago. The lower profit was primarily due to a one-off deferred tax
adjustment of RM8.9 million in the third quarter of FY2014.
On Masteel’s proposed Iskandar Malaysia Commuter rail project via its jointventure company Metropolitan Commuter Network Sdn Bhd, the Group remains
positive of realizing the project.
Masteel had, in January 2015, submitted an updated project proposal to the
Ministry of Transport for its review. Additionally, the Group is in the midst of
discussions with several potential investors to secure project funding.
“We continue to hold productive discussions on the commuter rail project with
various key stakeholders, and all parties are committed towards its eventual
success,” concluded Dato’ Sri Tai.
Financial Summary (Unaudited Consolidated Results)
RM'000
Revenue
Pre-tax Profit
Net Profit to Shareholders
Basic EPS (sen)
4Q14 to
31.12.14
392,169
6,186
4,515
1.99
4Q13 to
31.12.13
351,961
4,047
3,626
1.66
Dato’ Sri Tai Hean Leng, Managing Director and
CEO of Malaysia Steel Works (KL) Bhd
Change
11.4%
52.9%
24.5%
19.9%
FY14 to
31.12.14
FY13 to
31.12.13
1,451,933
28,108
15,797
6.98
1,375,441
28,957
27,014
12.38
Change
5.6%
(2.9%)
(41.5%)
(43.6%)
Masteel’s new rolling mill in Bukit Raja,
targeted to come on-stream in mid-2015
Page 2 of 3
About Masteel
Malaysia Steel Works (KL) Bhd, listed on the Main Market of Bursa Malaysia
Securities Berhad, is one of the top five integrated steel companies in Malaysia. It
is involved in the manufacturing of high-tensile deformed steel bars, mild steel
round bars and steel billets.
It has 68 domestic dealers and several international trading houses as partners in
Australia, New Zealand, Indonesia, Singapore, Thailand, Vietnam and the
Philippines.
Masteel has vast experience in the operations & maintenance of the latest process
technologies and automation systems with over 40 years of track record of
managing European-made steel mills and industrial plants.
Masteel was awarded the “BestBrands Award 2012-2013 in Manufacturing – Steel”,
“BestBrands Signature Award 2013-2014 in Manufacturing – Steel”, and Masteel’s
MD/CEO Dato’ Sri Tai Hean Leng was awarded the “Brand Personality Awards 20122013” by The BrandLaureate.
In 2014, Masteel was ranked number 75 in the list of Malaysia’s Top 100 brands
compiled by Brand Finance Plc U.K, valuing the Masteel brand at USD26 million (RM
92.3 million).
Issued for and on behalf of MALAYSIA STEEL WORKS (KL) BHD by Aquilas
Advisory (Malaysia) Sdn Bhd. For media enquiries, please contact:
Ms. Julia Pong
Mr. Tay Tze Yi
[email protected]
[email protected]
T: 03-2711 1391 / 012-390 9258
T: 03-2711 1391 / 016-338 0555
Page 3 of 3