Masteel presents plan for Iskandar-Woodlands rail link

PETALING JAYA: Malaysia Steel Works (KL) Bhd (Masteel), which posted a net loss of RM24.1 million for the third quarter ended Sept 30, 2015 (3Q15), recently presented a plan for the proposed rail transit network project interlinking Iskandar Malaysia in Johor and Woodlands, Singapore.
“The company has recently met Perbadanan Aset Keretapi’s senior management to present the company’s town planning scheme for Kempas land that is earmarked for the construction of the company’s proposed commuter train depot and other assets as required by the Ministry of Transport,” Masteel said in a filing with the stock exchange yesterday.
Masteel had entered into a head of joint venture agreement with KUB Malaysia Bhd in 2011 to collaborate in the joint-venture company Metropolitan Commuter Network Sdn Bhd to pursue the rail transit network project.
Meanwhile, Masteel saw a net loss of RM24.1 million for 3Q15 from a net loss of RM6.1 million in 3Q14, mainly due to foreign exchange losses.
Excluding foreign exchange losses, the group recorded quarter-on-quarter recovery in 3Q15, with core loss before tax narrowing to RM3.8 million, a marked reduction of RM6.2 million compared with a core loss before tax of RM10.0 million in 2Q15.
It saw a lower revenue of RM301.4 million in 3Q15, compared with 3Q14’s revenue of RM362.1 million.
Masteel managing director and CEO Datuk Seri Tai Hean Leng said while 3Q15 was a challenging time for the group due to the unfavourable foreign exchange and competition, it, however, sees conditions improving as the ringgit continues to rebound, reflecting the country’s strong and stable economic fundamentals.
“More importantly, we saw a recovery in our top line in 3Q15 on strengthened demand for steel bars. We are optimistic that commencement of our new rolling mill will allow the group to achieve better economies of scale, thus enabling us to produce competitively, which would contribute positively to our bottom line in the coming months,” he said in a statement yesterday.
Masteel expects to turn around next year, as its newly-commissioned rolling mill in Bukit Raja is anticipated to contribute additional revenue of up to RM200 million a year.
For the nine-month period, Masteel slipped into the red with a net loss of RM49 million against an RM11.3 million net profit for the same period last year, while revenue fell to RM869 million, compared with RM1.1 billion a year ago.
On prospects, Tai said it expects to see an increasing supply of scrap metal from regional countries such as China, Japan, and Korea in the coming years.