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 3Q 2011 Results Briefing Financial Results for 3 rd Quarter ended 30 September 2011 Kuala Lumpur - 4 November 2011

2 Disclaimer Notice This presentation should be read in conjunction with Malaysia Smelting Corporation Berhad results for 3Q 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. 3Q 2011 Performance Highlights Tin Market Overview MSC Group Development Outlook Appendices 3

4 3Q 2011 Results Briefing - Highlights FINANCIAL 3Q Revenue RM 907 million, up 26.0% over 3Q M Revenue RM 2,498 million, up 25.2% over 9M Q Profit before tax RM 52 million, up 121.7% from RM 23 million (before abnormal items) for 3Q M Profit before tax RM 151 million, up 123.7% from RM 68 million (before abnormal items) for 9M 2010 On track to achieve record profit - 9M Profit after tax RM 112 million, a turnaround from a loss of RM 72 million (after abnormal items) for 9M Q Earnings per share 42 sen, 3Q 2010 loss per share of 49 sen 9M Earnings per share 109 sen, 9M 2010 loss per share of 78 sen RM million sen Revenue 1Q 2Q 3Q Earnings per share 1Q 2Q 3Q

5 3Q 2011 Results Briefing - Highlights FINANCIAL Cash position remains healthy RM 235 million end of 3Q 2011 from RM 237 million end of 2Q 2011 and RM 119 million end of Total long and short term borrowings reduced to RM 584 million end of 3Q 2011 from RM 736 million end of 2Q 2011 and RM 701 million end of Gearing declined accordingly to 1.16x end of 3Q 2011 from 2.28x end of Total assets decreased marginally to RM1.34 billion end of 3Q 2011 from RM 1.45 billion end of 2Q 2011 due to lower inventories and receivables. Net assets per share continued to increase to RM4.60 end of 3Q 2011 from RM3.53 end of Interim gross dividend of 12 sen per share was paid out on 28 September 2011 (1H Nil). Expect another dividend payment after announcement of 4Q results. ( X ) Gearing Dec-10 Mar-11 Jun-11 Sep-11 Net assets per share RM Dec-10 Mar-11 Jun-11 Sep-11 5

6 3Q 2011 Results Briefing - Highlights OPERATIONS 3Q 2011 Group production 13,592 tonnes, up 12.8% from 12,045 tonnes in 3Q M 2011 Group production 36,554 tonnes, up 5.9% from 34,529 tonnes in 9M DEVELOPMENTS Successful completion and commencement of production of a new production unit at Rahman Hydraulic mine in May 2011 contributing 20% increase in mine output. On-going upgrading of smelting and refining facilities at Butterworth Smelter to increase refining capacity and improve efficiency. On-going efforts to acquire tin exploration and mining concessions and development projects in Malaysia, Indonesia and DR Congo. Proposal submitted for extension of PT Koba Tin Contract of Work for another 10 years from Continuing efforts to divest remaining non-tin assets at acceptable price. 6

7 3Q 2011 Highlights Production (in tin metal equivalent) Q (tonnes) Q (tonnes) Q (tonnes) M (tonnes) M (tonnes) 3Q 2011/ 3Q 2010 ( % ) 9M 2011 / 9M 2010 (%) 2010 FY MSC Butterworth smelter Rahman Hydraulic Tin 9,473 10,028 12,039 31,540 29, % 7.0% 38, ,477 1, % 12.6% 1,769 PT Koba Tin 1,763 1,698 1,553 5,014 5,058 (2.4)% (0.9)% 6,644 Group total * 11,236 11,726 13,592 36,554 34, % 5.9% 45,381 * Sum of production from PT Koba Tin and Butterworth smelters MSC Butterworth smelter operating at full capacity Higher production in Rahman Hydraulic Tin due mainly to improved operational efficiency and the commissioning of a new palong Sustainable production at PT Koba Tin 7

8 Financial Highlights Income Statement (RM million) Q Q Q M M 3Q 2011/ 3Q 2010 (%) 9M 2011 / 9M 2010 (%) Total Revenue ,498 1, Profit/(loss )before tax and unusual items Unusual items (122) n.m. n.m. Profit/(loss) before tax (54) n.m. n.m. Profit/(loss) after tax (72) n.m. n.m. Profit attributable to equity holders of MSC* Earnings per share (sen) (58) n.m. n.m (78) n.m. n.m. * After deducting profit attributable to minority interests 8

9 Segmental Reporting - 9 months 2011 (RM million) REVENUE Tin Smelting Tin Mining Others (Eliminations)/ Adjustments Sales to external customers 2, ,498 Inter-segment sales (537) - Total Revenue 2, (537) 2,498 RESULTS Profit / (loss) from operations (3) Finance costs (10) (5) (3) - (18) Share of profit of associates (1) Profit / (loss) before tax Income tax (11) (27) 0 0 (39) Profit / (loss) after tax Total 9

10 Balance Sheet Summary (RM million) 30 Sep Dec 2010 Increase / (Decrease) Total Assets 1,342 1, % Inventories (44) (10.9)% Receivables % Cash % Total Liabilities (76) (8.3)% ST borrowings (81) (13.1)% LT borrowings (36) (43.3)% Net assets % Shareholders funds % Net assets per share (RM) Net debt (RM mil) Gearing* * Total debt / Total equity x x 1.07 (233) % 30.3% (49.3)% (40.0)% PRIVATE AND CONFIDENTIAL 10

11 LME Cash Settlement Prices USD / Tonne Q 17,209 29,910 2Q 17,882 28,923 3Q 20,409 24,795 4Q 25,873 Average 20,447 3Q average price 14.3% lower than 2Q % higher than 3Q % higher than 2010 average 9M average price % higher over 9M

12 Tin price rebounded from crisis selling 12

13 Tin Market Overview The panic selling that was partly caused by funds liquidation in 3Q has dissipated. Prices have since rebounded from a low of USD 19,000/t to stabilise in a narrow range of between USD21,000/t and USD23,000/t. Chinese domestic prices continue to trade at a premium compared to LME prices and the arbitrage opportunity has attracted a surge in import into China. Tin imports increased to 3,610 tonnes in September, up by 125% on the previous month and 167% compared to September last year. It is also the highest level since April In an effort to tighten the market and push prices above USD25,000 per tonne, smelters in the Indonesian tin-producing region of Bangka Island have agreed to enforce export stoppage from October 1 and some smelters have even recently extended the ban to the end of the year. Source: CRU, ITRI 13

14 Tin Market Overview (2) With production of around 8,500 tonnes a month, the ban may cut up to 30% of world s tin shipment over short term and provide a long term floor for prices. Preliminary export data from Indonesia already showed a 24% yoy decline to 5,233 tonnes in September prior to the export ban. Peru s August tin production fell 8% yoy and year to August production fell 20% to 19,346 tonnes. Given the supply constraints, LME stock which peaked at 23,400 tonnes in August has been falling and is at its lowest level this year at 15,690 tonnes (as of 3 Nov). Tin consumption has weakened in the fourth quarter of 2011 as a result of the global economic slowdown and uncertainty following the Eurozone debt crisis. However due to the ongoing supply constraints, CRU/ITRI still maintains its forecast of an overall supply deficit in Long term fundamental supply/demand factors are still positive and should lend support to tin prices. Source: CRU, ITRI 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 was commissioned in May and would increase production capacity by 20% MSC Butterworth smelter further efficiency improvements for additional refining capacity. Signed a Confidentiality Agreement with DR of Congo in May to explore JV opportunities in the country. Continuing improvements in operational efficiencies for cost-effective mining operations. Development of new mining units in Indonesia by PT MSCI under cooperation agreements. Enhancing efforts to increase tin resources and sustain production through investments in exploration and acquisition of new and existing mining projects in Malaysia, Indonesia and DR Congo. Continuing efforts for divestment of remaining non-tin assets at acceptable price 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 Moving forward in the short / medium term, the operating environment is expected to be difficult and challenging due to weaker demand for commodities arising from the prevailing global economic slowdown and the ongoing uncertainty in the global financial market following the sovereign-debt crisis in the Euro zone. Nonetheless, the Board expects the overall performance of the Group to remain profitable in the fourth quarter of the year MSC remains optimistic on the long term prospects of the tin industry and believes that the Group will be able to capitalize on the positive global tin market fundamentals to expand its business. 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

18 Appendix 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 18

19 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, August

20 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 20