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 FY 2011 Results Briefing Financial Results for the year ended 31 December 2011 Kuala Lumpur - 2 April 2012

2 Disclaimer Notice This presentation should be read in conjunction with Malaysia Smelting Corporation Berhad results for 4Q 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 forwardlooking statements, which are based on Malaysia Smelting Corporation Berhad s current view of future events. 2

3 Contents Pages Performance Highlights Tin Market Overview MSC Group Developments & Restructuring Closing Remarks 25 3

4 Group Production (in tin metal equivalent) 2011 Group production 46,599 tonnes, up 2.7% from 45,381 tonnes in 2010 (tonnes) Q Q Q Q Q 2011/ 4Q 2010 ( % ) 2011 / 2010 (%) MSC Butterworth smelter Rahman Hydraulic Tin 9,473 10,028 12,039 8,727 40,267 38,737 (5.8)% 3.9% ,010 1, % 13.6% PT Koba Tin 1,763 1,698 1,553 1,318 6,332 6,644 (16.9)% (4.7)% Group total * 11,236 11,726 13,592 10,045 46,599 45,381 (7.4)% 2.7% * Sum of production from PT Koba Tin and Butterworth smelters MSC Butterworth smelter operating at full capacity Higher production in Rahman Hydraulic Tin as a result of improved operational efficiency and the commissioning of a new palong Lower production at PT Koba Tin affected by export moratorium imposed by Indonesian Tin Association and lower tin prices. 4

5 2011 Results Highlight FINANCIAL 2011 revenue RM 3,098 million, up 13.1% over 2010 Profit before tax (before unusual items) RM 116 million, up 53.2% from RM 76 million in 2010 Profit after tax (after unusual items) RM 57 million, against a loss of RM100 million in Earnings per share 61.6 sen, a turnaround from loss per share of 107 sen in Net assets per share increased to RM4.27 end of 2011 from RM3.53 end of Pretax return on average shareholders funds of 26%, compared with -25% in RM million sen Revenue 1Q 2Q 3Q 4Q Earnings per share 1Q 2Q 3Q 4Q

6 2011 Results Highlight FINANCIAL Cash position very healthy at RM 235 million end of 2011, up from RM 119 million end of Secondary listing on SGX raised RM100 million. Net cash generated from operating activities improved from RM56 million to RM209 million in Total long and short term borrowings reduced to RM 564 million end 2011 from RM 701 million end Hence, reduced gearing at 1.2x end 2011 from 2.3x. Proposed final gross dividend of 18 sen per share. Together with 12 sen interim dividend, full year dividend is 30 sen (FY sen) This translates into a gross dividend yield around 7% and represents a distribution of 37% of 2011 net earnings. ( X ) RM Gearing Sep-11 Jun-11 Mar-11 Dec-10 Net assets per share Sep-11 Jun-11 Mar-11 Dec-10 Dec Dec-11 6

7 5 year trend revenue & profit Revenue (RM Mil) 7

8 5 year trend per share values 8

9 Financial Highlight Income Statement (RM million) Q Q Q Q Q 2011/ 4Q 2010 (%) Total revenue ,099 2,739 (19) 13 Profit / (loss) before tax and unusual items 2011 / 2010 (%) (35) n.m. 53 Unusual items (25) (25) (154) (24) (84) Profit / (loss) before tax Profit / (loss) after tax Profit attributable to equity holders of MSC* Earnings per share (sen) (60) 91 (78) 146 n.m (56) 57 (100) 100 n.m (46) 61 (80) 109 n.m (46) 62 (107) 56 n.m. * After deducting profit attributable to minority interests 9

10 Provisions made in 2011 (RM million) Loss on disposal and impairment for investment in BCD Resources 47.1 Impairment provision for mining asset 56.3 Impairment provision for goodwill arising from acquisition of subsidiaries Gain on disposal of investment in PT Tenaga Anugerah (subsidiary of TMR) Impairment provision for investment in 5.2 (21.0) - Guilin Hinwei Tin Asian Mineral Resources TMR 16.6 (Gain) / loss on disposal of disposal group classified as held for sale 0.3 Total

11 Segmental Reporting (RM million) International Smelting Tin Mining (Malaysia) Tin Mining (Indonesia) Others Eliminations / Adjustments REVENUE 3, (654) 3,098 Total RESULTS Profit / (loss) from operations (29) (1) Finance costs (13) 0 (6) (5) - (24) Share of profit of associates Profit before exceptional losses (1) (35) Exceptional losses, net (2) - (17) (7) (25) Profit before tax (52) Income tax (14) (17) (2) 0 (1) (34) Profit / (loss) net of tax (54)

12 Statement of Financial Position - Summary (RM million) 31 Dec Dec 2010 Increase / (Decrease) Total Assets 1,272 1, % Inventories (101) (25.0)% Receivables % Cash % Total Liabilities (103) (11.3)% ST borrowings (93) (15.1)% LT borrowings (44) (53.8)% Net assets % Shareholders funds % Net assets per share (RM) Net debt (RM mil) Gearing* * Total debt / Total equity x x 0.74 (254) % 21.0% (43.7)% (46.6)% PRIVATE AND CONFIDENTIAL 12

13 LME Tin Prices USD / Tonne Q 17,209 29,910 2Q 17,882 28,923 3Q 20,409 24,795 4Q 25,873 20,823 Average 20,447 26,113 4Q average price 16.0% lower than 3Q % lower than 4Q % higher than 2010 average FY 2011 average price 27.7% higher over FY

14 LME stocks and prices, ,000 tonnes, 3-months price in US$/tonne 35,000 30,000 25,000 20,000 15,000 10,000 5, Source: ITRI 14

15 Tin Market Overview According to data compiled by ITRI, of the top five tin producers in 2011, only 2 custom smelters - MSC and Thaisarco reported an increase in production. The Chinese companies showed a mix of gains and losses, while the South American producers achieved lower output. Overall, Chinese refined tin production in 2011 showed a moderate increase of 4.9% yoy at 155,855 tonnes. Peru reported the biggest decline, down 16% yoy to 30,000 tonnes, following an enforced cut back in mining rates at its only tin producer Minsur in the first half of last year. In Indonesia, PT Timah and PT Koba, the two integrated Indonesian producers, both reported lower production partly because of the tin export moratorium which took effect from the beginning of 4Q. Total shipments in 4Q during which the export halt was effective were down 11% compared to 4Q a year ago. Despite the supply disruption, Indonesia still managed to show a 4% increase in export for the full year of 2011 to 96,020 tonnes YTD, exports have gradually normalised with 5,380 tonnes in January (-27% yoy) and 8,325 tonnes in February (+35% yoy) LME tin stocks currently at around 12,500 tonnes have fallen to the lowest level since 2009 due largely to the arbitrage trade in China. Source: CRU, ITRI 15

16 Tin Market Overview (2) ITRI estimated that more than 20,000 tonnes of tin metal had probably been imported by China between August 2011 and January this year. This has caused the Chinese market to be temporarily oversupplied and is closing the price differential between LME and China. The return of investment funds buying into base metals was the main driving force behind higher tin prices in 1Q. Tin is among the best performing metals gaining about 25% year to date. Volatility in commodity markets is likely to persist as the European sovereign debt crisis and general weakness in the manufacturing sector across key markets are expected to weigh on sentiment. In general, demand is still expected to be stable. ITRI forecast a modest 1.6% gain in consumption for MSC maintains that long term prospects of the industry remain intact and concurs with ITRI s view that a modest pick up in demand combined with continuing supply challenges will tweak market balance to a small deficit of around 12,000 tonnes this year. The Group will continue to capitalize on the positive global tin market fundamentals to expand its business and enhance our pre-eminent position in the industry through new investments. Source: CRU, ITRI 16

17 Leading Tin Companies Source: ITRI 17

18 World Supply / Demand Balances in Refined Tin Source: ITRI 18

19 Tin use in China stronger tonnes China Rest of world Source: ITRI 19

20 Tin technology opportunities Potential use tpy (medium term) Lead-free electronics Lithium ion batteries Stainless steel Fuel catalysts Fire retardants Brake pads Others 0 5,000 10,000 15,000 20,000 Source: ITRI 20

21 World Production and Consumption of Refined Tin Source: ITRI 21

22 China a net importer again Calculated trade balance in refined tin, tonnes 4,000 3,000 Net Imports Exports deduced from third countries imports data incomplete from June 11 2,000 1, ,000-2,000 Net Exports -3, Apr- 08 Jul- 08 Oct Apr- 09 Jul- 09 Oct- 09 Jun- 10 Apr- 10 Jul- 10 Oct Apr- 11 Jul- 11 Oct- 11 Source: ITRI 22

23 Indonesia production has fallen 140 Mined Refined 000 tonnes Note: refined production excludes metal re-refined in other countries Source: ITRI 23

24 MSC Group Developments & Restructuring PT Koba Tin entered into a strategic Alliance Agreement with Optima Synergy Resources Ltd; in the process of seeking a 10 year extension of CoW from Rahman Hydraulic (RHT) increases royalty payment from 2.5% to 5% to the State of Perak and secured extension of mining leases to year 2030 in return. MSC Butterworth smelter further efficiency improvements for additional refining capacity. Amount spent on upgrading works up to Feb 2012 is RM 7.7 million. Plans to increase production :- PT Koba Tin turnaround and restructuring Rahman Hydraulic Tin mining pit optimisation and increase in processing facility Restructuring of all Indonesian operations : PT Koba Tin, PT MSCI, PT Bangka Resources, TMR (PTTA) 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. Integrated capabilities / focused business strategy A unique tin player Continuing efforts to divest remaining non-tin assets at acceptable price :- granted Pala Investments a right of first refusal over MSC s holdings in AMR. KM Resources (30% owned) generated US$48 mil net profit, vs. US$18 mil in

25 Closing remarks 25

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