$MSC / 5916 (MALAYSIA SMELTING CORPORATION BERHAD): Increased Profits in Tin Mining

1. During Q3FY23, $MSC / 5916 (MALAYSIA SMELTING CORPORATION BERHAD) reported a 5.78% increase in revenue, totaling RM364.02m year-over-year. This rise was driven by a higher average tin price of RM123,800 in 3QFY23, compared to RM104,700 in 3QFY22 per metric tonne, alongside increased sales quantity of refined tin. However, the company faced a 7.31% decrease in year-to-date revenue due to a lower average tin price of RM118,800 in 9MFY23, compared to RM148,800 in 9MFY22 per metric tonne, despite the higher sales quantity of refined tin.

2. This quarter, $MSC / 5916 (MALAYSIA SMELTING CORPORATION BERHAD) achieved a profit before tax (PBT) of RM20.41m, a significant improvement compared to the loss of RM39.71m in Q3FY22. Similarly, on a year-to-date basis, the company recorded a higher PBT of RM114.26m.

3. The tin smelting segment, the largest revenue contributor, reported a loss before tax of RM3.4m in 3QFY23 compared to a loss of RM61.1m in 3QFY22. This was attributed to higher average tin price and increased sales quantity of refined tin. The TSL furnace at Pulau Indah underwent annual shutdown and maintenance since June 2023, resuming smelting activities in August 2023. In contrast, 3QFY22 witnessed sharp declines in tin prices and extended furnace outage at the Pulau Indah plant due to logistic delays in securing specialized fire-rated furnace bricks. On a year-to-date basis, the tin smelting segment recorded a profit before tax of RM51.3m in 9MFY23 compared to a loss before tax of RM32.2m in 9MFY22. The improved performance in 9MFY23 was primarily due to higher profits from increased sales of refined tin, derived from processed tin intermediates, and increased sales of by-products and smelting revenue.

4. The tin mining segment reported a PBT of RM23.8m in 3QFY23 compared to RM10.9m in 3QFY22, primarily attributed to higher average tin prices in 3QFY23. Additionally, there was a one-off provision for legal case settlement of RM4.7m in 3QFY22. On a year-to-date basis, the tin mining segment recorded a PBT of RM70.7m in 9MFY23 compared to RM121.3m in 9MFY22.

5. Despite global economic concerns such as inflation and geopolitical tensions, $MSC / 5916 (MALAYSIA SMELTING CORPORATION BERHAD) maintains a cautious approach. It is dedicated to improving operational efficiencies across its smelting and mining businesses, emphasizing technological advancements, workforce enhancements, and logistics. The Pulau Indah plant's technological upgrade is progressing for full commissioning, while the planned closure of the older Butterworth plant is anticipated to increase efficiency, reduce operational costs, and promote energy-saving measures, aiming to reduce the overall carbon footprint by up to 30% by the staged decommissioning starting in 2024. In the tin mining segment, strategies to boost daily mining output and overall productivity include expanding mining activities and resources.