Malaysia Smelting Corporation has reported a 25% fall in revenues and a pre-tax loss of RM 62.7 million (US$20.2 million) before unusual items in 2012, compared to a pre-tax profit before unusual items of RM 116.4 million in 2011. However by curtailing operations by its 75%-owned subsidiary in Indonesia, PT Koba Tin, it moved back into the black in the final quarter of the year, with a group pre-tax profit before unusual items of RM2.6 million.
The group’s Malaysian operations – the Butterworth smelter and Rahman Hydraulic mine – made reasonable profits of RM85.9 million, despite lower prices and what was described in a statement accompanying its unaudited accounts as a “very challenging market environment” in global custom smelting. The mine continued to expand production last year.
In Indonesia PT Koba Tin had losses of RM137.5 million “due to the adverse impact of lower tin prices and production, mine rehabilitation costs, additional provisions for termination benefits, high rationalisation costs and impairment of mining assets.” Koba’s Contract of Work expires on 31 March 2013 and all operations have been suspended pending the outcome of an application for a 10 year extension. If the CoW is extended, MSC has an agreement in place to reduce its shareholding to a minority interest by selling 60% of its stake to a local group OSRL.
Summarising its view of prospects for the current year, the company stated that “although the operating environment is expected to continue to be difficult and challenging amid prevailing global economic uncertainties and regardless of the outcome of Koba Tin’s CoW situation, the Board expects the Group’s performance for 2013 to be satisfactory.”
