Prestar returns to the black in Q2 with RM19.22 mln net profit

KUALA LUMPUR, Prestar Resources Bhd has returned to the black with a net profit of RM19.22 million in the second quarter ended June 30, 2021 (Q2 FY2021) from a net loss of RM2.89 million in the same period last year.

In a statement to Bursa Malaysia today, the steel products and equipment maker said the turnaround was due to higher steel prices on strong demand and positive contributions from its steel pipes, guardrails and racking division.

“Revenue was more than doubled to RM124.49 million from RM53.32 million previously, attributable to strong demand for steel pipes and related products, as well as higher steel prices which helped to boost sales margin,” it said.

For the cumulative six-month period ended June 30, 2021 (1H FY2021), Prestar’s net profit jumped 32-fold to RM37.55 million from RM1.18 million in the same period a year ago, as revenue increased 80 per cent to RM264.68 million from RM147.02 million previously.

Group managing director Datuk Toh Yew Peng said demand for the company’s steel pipes and related products were strong in April and May despite the reimposition of the Movement Control Order (MCO) since Q1 FY2021, but the robust growth was hampered when a total lockdown was imposed since June 1, 2021.

Moving forward, Toh expects steel price to remain on an upward trend as the worldwide supply chain, which had been disrupted badly by the COVID-19 pandemic, had caused the prices of most commodities and shipping costs to increase drastically.

“Locally, the iron and steel sector is still not in full operation due to lockdown measures imposed, thus affecting the demand and supply of steel products.

“The board expects this trend to continue for the rest of this financial year and the company adopts a cautious and pragmatic approach to meet customers’ demand as well as ensuring efficient management of supply chain and working capital,” he said.

In another development, Prestar said it is extending its collaboration with Murata Machinery, Ltd (Japan) for the supply of automated storage and retrieval system (ASRS) to another nine of the latter’s subsidiaries.

According to Prestar, its wholly-owned unit Prestar Storage System Sdn Bhd had on Aug 17, 2021 entered into a supplemental manufacturing partnership agreement with Murata’s logistics and automation division to include the nine subsidiaries.

The subsidiaries are in the United States, China, Europe, India, Thailand, Singapore, Vietnam, Taiwan, and Hong Kong, said Prestar.

Source: BERNAMA News Agency