Malaysia Smelting Corporation Bhd A Global Integrated Tin Mining and Smelting Group

Transcription

1 Malaysia Smelting Corporation Bhd A Global Integrated Tin Mining and Smelting Group 1Q2011 Results Briefing Financial Results for 1 st Quarter ended 31 March 2011 Kuala Lumpur - 9 May 2011

2 Disclaimer Notice This presentation should be read in conjunction with Malaysia Smelting Corporation Berhad results for 1Q2011. The presentation may contain forward-looking statements that involve risks and uncertainties. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. As these statements and financial information reflect our current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially form these-looking statements and financial information. You are cautioned not to place undue reliance on these forward-looking statements, which are based on Malaysia Smelting Corporation Berhad s current view of future events. 2

3 Contents Pages 1 Introduction 4 2 1Q2011 Performance Highlights Tin Market Overview MSC Group Development 15 5 Outlook 16 3

4 Introduction Description Major assets/ earnings contributors Financials in FY2010 About Malaysia Smelting Corporation Berhad One of the world s leading integrated producers of refined tin metal Production of refined tin in 2010 ranked 2 nd in the world, contributing 13% of world production 1. Butterworth smelter in Penang 2. Rahman Hydraulic Tin: open pit tin mine in northern Perak 3. PT Koba Tin: alluvial tin mine and smelter in Bangka, Indonesia Total Sales Revenue: RM2.7 billion Net cash generated from operating activities: RM56 million Profit before tax and unusual items: RM76 million Total Assets: RM1.2 billion Net Assets: RM307 million Smelter capacity (Designed) Reserves / Resources (JORC compliant) SGX-ST Listing in January 2011 Butterworth smelter: PT Koba Tin smelter: Total: 35,000 tonnes 25,000 tonnes 60,000 tonnes Rahman Hydraulic Tin: 19,479 tonnes (as at March 2010) PT Koba Tin: 39,433 tonnes (as at June 2010) Raised RM 104 million Issued Capital increased by 25 million shares to 100 million shares Market Cap RM438 million (SGD178 million) as at 5 May

5 LME Cash Settlement Prices USD/TONNE Remarks 2010 Q1 17,209 Q2 17,882 Q3 20,409 Q4 25,873 Average , Q1 29,910 74% Increase over Q % Increase over Q % Increase over Average 2010 HIGHLIGHTS Q Recent price highs of over USD 30,000/tonne heavily influenced by investment fund buying 2. High prices causing short term additional supply - from previously unreported stocks in China - from stocks of tin in slags in Indonesia - increase in small scale production in Indonesia 3. Other factors - Development in global financial/commodities markets - Conflict minerals issue in Africa - Crisis in Japan 4. Long term fundamental supply/demand factors still positive 5

6 1Q2011 Highlights Production (in tin metal equivalent) Q (tonnes) Q (tonnes) Increase/ (Decrease) ( % ) 2010 FY MSC Butterworth smelter Rahman Hydraulic Tin 9,473 9, , ,769 PT Koba Tin 1,763 1,803 (2.2) 6,644 Total 11,688 11, ,381 MSC Butterworth smelter operating at full capacity - (2,870 tonnes or 30% under tolling contract) Higher production in Rahman Hydraulic Tin due mainly to improved operational efficiency Marginally lower figure in PT Koba Tin due mainly to lower production from treatment of slag stocks. However mine production was higher 6

7 Financial Highlights (RM million) Q Q Increase/ (Decrease) (%) 2010 FY Total Revenue ,739 Profit/(loss )before tax and unusual items Unusual items 0 (48) - (154) Profit/(loss) before tax 46 (20) (78) Profit/(loss) after tax 33 (28) (100) Profit attributable to equity holders of MSC* 28 (29) (80) Earnings per share (sen) 30 (39) (107) * After deducting profit attributable to minority interests 7

8 Financial Highlights Segment Reporting 1 st Quarter 2011 (RM million) Malaysia Indonesia Others (Eliminations)/ Adjustments Total REVENUE Sales to external customers Inter-segment sales (150) - Total Revenue (150) 738 RESULTS Profit / (loss) from operations (6) 49 Finance costs (5) (2) - 1 (6) Share of profits of associates Profit / (loss) before tax (5) 46 Incomes tax (7) (8) - 1 (14) Profit / (loss) after tax (4) 32 8

9 Unaudited Condensed Consolidated Balance Sheet Summary (RM million) As at 31 Mar 2011 As at 31 Dec 2010 Increase(+)/ Decrease(-) Total Assets 1,403 1, % Inventories % Trade and other receivables Cash, bank balances and deposits % % % Total Liabilities % Net assets % Net assets per share attributable to equity holders of MSC (RM) % PRIVATE AND CONFIDENTIAL 9

10 Tin Market Overview China tin consumption is still on an upward trend, though in recent months it has been a net exporter of refined tin (from previously unreported stocks) mainly to take advantage of higher price differentials in international markets Current high tin prices are supported by investment funds who are still maintaining a long term bullish view of the tin market There has been increased production from small scale miners particularly in Indonesia because of higher tin price, but this is not sustainable in view of law enforcement by the Government authorities as well as scarcity of accessible mining areas ITRI estimated that the recent crisis in Japan may result in a short term drop in consumption which will pick up again when rebuilding the economy begins A significant fall in price will constrain supply growth and the market will continue to be in deficit For the long term, we expect market fundamentals would continue to be strong with annual tin consumption expected to grow between 2% and 3% y.o.y. (consistent with ITRI forecast), with the market still experiencing supply constraints Based on this forecast, an additional 7,000 8,000 tonnes need to be produced annually to meet the growth in consumption 10

11 MSC - 2nd Largest Refined Tin Producer in 2010 LEADING TIN COMPANIES (Production, tonnes refined tin) Company % YoY MSC expects to maintain its No.2 position in 2011 Yunnan Tin (China) 61,129 58,371 55,898 59, % Malaysia Smelting Corp 25,471 31,630 36,407 38, % PT Koba Tin (Indonesia) 7,724 7,109 7,455 6, % Total MSC Group 33,195 38,739 43,862 45, % PT Timah (Indonesia) 58,325 49,029 45,086 40, % Minsur (Peru) 35,940 37,960 33,920 36, % Thaisarco (Thailand) 19,826 21,731 19,300 23, % Guangxi China Tin (China) 13,193 12,037 10,500 14, % Yunnan Chengfeng (China) 17,064 13,500 14,947 14, % EM Vinto (Bolivia) 9,448 9,544 11,805 11, % Metallo Chimique (Belgium) 8,372 9,228 8,690 9, % Geijiu Zi-Li (China) 8,234 7,000 5,600 9, % Jiangxi Nanshan Tin (China) 8,007 3,100 3,000 6, % Data: ITRI 11

12 Global Tin Supply will continue to be in deficit Global Tin Supply/Demand Balance ('000 tonnes) f % change Production % DLA Sales Consumption % Market Balance Reported stocks % Stock Ratio (weeks consumption) % Source: ITRI, April

13 World Refined Tin Production and Consumption Trends ('000 tonnes) f Production China Indonesia* Malaysia Thailand Bolivia Brazil Peru Belgium Russia Other Total World Consumption China Japan Other Asia USA Other Americas Europe Other Total World * Note: Indonesian production excludes metal re-refined in other countries Data: production - CNI-A, Malaysia Chamber of Mines, MSC, PT Timah, Thaisarco, Minsur, SNIEE, WBMS consumption - USGS, WBMS, ITRI 13

14 Tin price marches on. 14

15 MSC Group - Development Integrated capabilities / focused business strategy A unique tin player Increasing the number of production units: PT Koba Tin additional 3 gravel pump mining units and 2 tailing retreatment facilities to sustain production level Rahman Hydraulic Tin an additional palong unit to increase production by 20% MSC Butterworth smelter further efficiency improvements for full-capacity operation Pro-active engagements with all stakeholders on conflict metals issues Continual improvements in operational efficiencies for cost-effective mining operations Mining of lower grade/marginal deposits Development of new mining units in Indonesia by PT MSCI under cooperation agreements Enhancing efforts in increasing tin resources and sustaining production through investments in exploration and in acquisition of new and existing mining projects in Malaysia and Indonesia Continuing with divestment of remaining non-tin assets Asian Mineral Resources Ltd (15.42%) nickel development in Vietnam KM Resources Inc (30%) copper, gold, silver and zinc mine in the Philippines 15

16 Outlook MSC is optimistic on the long term prospects of the tin industry and believes that the Group will be able to capitalize on the strong global tin market fundamentals and the current uptrend in tin prices We expect the current year overall performance to be significantly better than that of the previous year With the Group s refocus on the integrated tin business and our presence throughout the value chain, we could enhance our pre-eminent position and seize new investment opportunities in the industry PRIVATE AND CONFIDENTIAL 16

17 Malaysia Smelting Corporation Berhad A Global Integrated Tin Mining and Smelting Group THANK YOU