Malaysia Smelter Corporation Bhd. (MSC) has released its Q1 financial results showing a net profit of 24.9 million RM (US$ 6.0 million) due to higher refined tin sales and valuation adjustments as a result of higher tin prices at the end of the quarter.
The net profit compares to a 2.9 million RM loss made in the same period of 2015. The company said that, overall, its smelting operation is profitable, but that profits had been helped in Q1 by effect of the higher tin price on the valuation its tin inventory and a positive impact from foreign exchange rate variations. The company’s Rahman Hydraulic Tin (RHT) open pit mine also saw a 9% year-on-year increase in profits for the period to 6.2 million RM, primarily due to a higher volume of sales.
The company concluded that “the underlying operations of the group, comprising the Butterworth International Smelter and the Rahman hydraulic tin mine, are expected to perform satisfactorily for the current financial year.”
ITRI View: In 2015, MSC produced 30,209 tonnes of refined tin metal, down 13.6% on the previous year. The company also saw a 1.9% fall in tin-in-concentrate production from the RHT mine to 2,196 tonnes. The fall in output combined with the low tin price resulted in a 93% fall in pre-tax profit to 3.2 million RM during 2015. We expect production from the mine and smelter in 2016 to be broadly equivalent to last year’s levels with movements in the tin price remaining the primary influence on financial performance.
