Malaysia Smelting Corporation Berhad Releases Robust FY25 Results: Net Profit Surges, Dividend Boosted

Key Financial Highlights

• 4QFY25 Net Profit: RM39.9 million, up 32.2% year-on-year (YoY).
• 4QFY25 Revenue: RM480.7 million, a 7.2% YoY increase.
• FY25 Revenue: RM1.76 billion, up 4.1% YoY.
• FY25 Net Profit: RM82.0 million, a 3.3% YoY increase.
• Dividend: Proposed final single-tier dividend of 4 sen per share, total FY25 dividend 8 sen per share, representing an 82% payout ratio (RM33.6 million).

Segment Performance and Operational Insights

Tin Smelting Segment

• 4QFY25: Profit before tax of RM31.3 million (up from RM26.6 million in 4QFY24), driven by:
  • Higher tin prices (average realised: RM158,100/MT vs RM133,700/MT).
  • Sale and encashment of tin intermediates with higher margins.
  • Higher profit from sales of tantalum slag.
  • Foreign exchange gain.
  • Cost savings from closure of Butterworth plant.
• FY25: Profit before tax of RM26.0 million (down from RM32.3 million in FY24), affected by:
  • Lower ore intake due to supply shortages.
  • Temporary production disruption from a gas pipeline fire incident at the Putra Heights facility in Q2.
  • Partially offset by higher margin sales of tin intermediates.

Tin Mining Segment

• 4QFY25: Profit before tax of RM25.4 million (down from RM27.1 million), due to:
  • Temporary three-week suspension of mining operations.
  • Benefit from higher tin prices despite reduced production.
• FY25: Profit before tax of RM116.6 million (up from RM110.4 million), driven by:
  • Higher average tin prices.

Strategic and Operational Developments

• Operational Resilience: MSC demonstrated resilience amid operational challenges, including supply shortages and a fire incident.
• Market Support: Structural demand for tin from electronics, clean energy, artificial intelligence, and data centers continues to underpin market strength.
• Supply Chain Risks: While supply recovery is emerging from Myanmar and Indonesia, risks from regulatory changes, policy shifts, and geopolitical tensions persist and may affect tin supply.
• Cost Management: Closure of Butterworth plant has led to significant cost savings.
• Efficiency Improvements: Enhanced operations at Pulau Indah are expected to further improve profitability.
• Mining Productivity: MSC is actively improving productivity, expanding resources, and exploring new joint ventures to strengthen output and mitigate supply risks.

Shareholder and Price-Sensitive Information

• Dividend Proposal: The proposed final single-tier dividend of 4 sen per share brings the total FY25 payout to 8 sen per share, representing a very high payout ratio (82% of net profit), which is likely to be viewed positively by investors and may support share price.
• Operational Disruptions: Temporary suspension of mining operations and a fire incident at Putra Heights are important risk factors that may affect future profitability and should be monitored.
• Cost Savings: The closure of Butterworth and improved efficiencies at Pulau Indah are expected to positively impact future earnings.
• Supply Chain Uncertainties: Ongoing risks from regulatory and geopolitical developments could impact tin supply and MSC’s future performance.

Corporate Overview

Malaysia Smelting Corporation Berhad (MSC) is a leading global integrated producer of tin metal and tin-based products, and a world leader in custom tin smelting since 1887. MSC is a subsidiary of The Straits Trading Company Limited of Singapore, listed on both Bursa Malaysia and Singapore Exchange.

Conclusion

MSC’s FY25 results highlight strong financial and operational performance, supported by higher tin prices and cost management initiatives. The sizeable dividend payout and ongoing efficiency improvements are likely to be well-received by shareholders. Investors should remain attentive to supply chain risks and operational disruptions, but the company’s strategic positioning in growing tin demand sectors may support longer-term share value.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a licensed financial advisor before making investment decisions. The author and publisher assume no liability for any losses incurred as a result of decisions based on this information.

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