Masteel resumes trading today

PETALING JAYA: Malaysia Steel Works (KL) Bhd (Masteel) submitted its outstanding annual report for the financial year ended Dec 31, 2014 (FY14) yesterday and resumed trading today.
In a filing with Bursa Malaysia yesterday, it said that it had also submitted its outstanding quarterly report for the financial period ended March 31, 2015 and the outstanding annual audited accounts for FY14 on July 2 and June 19 respectively.
Earlier in April, the company said it would not be able to meet the April 30 deadline to submit its annual audited accounts for FY14 as its external auditor Messrs Nexia SSY was unable to express an opinion on its FY14 financial statements.
External auditor, Nexia SSY had raised various issues to the audit committee and the board on April 27, pertaining to the classification, description and recoverability of various transactions carried out by the company in FY14.
The company subsequently appointed special auditor UHY Advisory (KL) Sdn Bhd to conduct an independent and comprehensive review on the issues raised by Nexia SSY. Trading of its shares was suspended on May 12.
Meanwhile, Masteel said it is on track to commence its newly-constructed 200,000 MT per annum rolling mill in Bukit Raja, Selangor at the end of this month, which would boost its downstream steel bar production capacity from 450,000 MT per annum to 650,000 MT per annum upon reaching full capacity.
The expansion is expected to contribute an additional RM360 million yearly to the group's topline at full capacity. It would also match its upstream steel billet production capacity of 700,000 MT per annum.
"Our new rolling mill would allow us to convert at least 90% of our upstream steel billets into higher value-added steel bars, compared to about 60% at present. In addition to benefitting from better selling prices, the increased conversion rate would enable us to capture a larger share of steel bar demand from the robust domestic construction sector," said its managing director and CEO Datuk Seri Tai Hean Leng.
Tai said the domestic steel industry will benefit from government's efforts to curb imports of substandard steel products at non-competitive rates and the Construction Industry Development Board Malaysia (Service of Notice) Regulations 2015 which was gazetted this month.
"We hope that the stricter regulations would curb the high volume of cheap steel bar imports, especially from China where oversupply and price dumping are rampant. We thus look forward to domestic prices of steel bars improving to a more favorable range in the future, from current challenging conditions," he said.
He said it will remain vigilant on the overhang of cheap imported steel products which may continue to weigh on steel prices in the near term, as well as higher production costs due to rising natural gas prices and the weaker ringgit.
"We are confident that demand for steel bars would remain firmly intact on the robust construction activity in Malaysia in the long run. In this regard, Masteel would stand to benefit significantly, given our positioning in the Greater Klang Valley in close proximity to supply the requirements for many residential, commercial, and infrastructure projects."