Strong demand for steel products powers Prestar’s earnings
KUALA LUMPUR: Steel products and equipment maker, Prestar Resources Bhd’s net profit jumped 400% to RM15.76mil in the fourth quarter ended Dec 31,2020 and remains upbeat for this year due to strong demand for its products.
The company said on Wednesday the surge in profit from RM3.11mil a year ago was driven by strong demand and higher selling prices with positive contributions from its steel pipes, guardrails and racking division.
Prestar said revenue increased by 22.6% to RM137.05mil from RM111.77mil a year ago due to higher demand for steel pipes and related products. Its earnings per share rose to 8.12 sen from 1.59 sen.
For FY20, its net profit jumped by 300% to RM22.17mil from FY19’s RM5.53mil, underpinned by the strong 4Q performance.
However, FY20 revenue dipped to RM409.98mil from RM454.17mil due to the temporary slowdown in sales in April and May due to the Movement Control Order (MCO) restrictions and the reimposition of the Conditional MCO towards the end of 2020.
Prestar group managing director Datuk Toh Yew Peng attributed FY20’s strong earnings due to the easing of lockdowns in the third and fourth quarters and also higher demand for the company’s steel pipes and related products.
“The company resumed full operations in June last year. We reported higher sales for our steel pipes and related products with better margin in 3Q and 4Q on the back of increased raw materials prices and strong customers demand, ” he added.
Toh said Prestar expects strong demand for its steel pipes and related products in line with the continued upward trend in global commodities prices.
Prestar supplies steel pipes to original equipment manufacturers, manufacturers of automotive, furniture and equipment.
He added these manufacturers continued to receive strong orders while the increasing e-commerce activities had stimulated demand for its racking products from third party logistics companies.
“Our supplies of guardrails for Pan Borneo Highway Project in Sarawak are also progressing well, ” he said, adding the company was also looking to supply its products to the project in Sabah.