Posted on 16 Jul 2015
Executive director Oh Yung Sim said at the company’s AGM that demand for steel products in the country was strong, due to projects such as the Mass Rapid Transit and Petroliam Nasional Bhd’s Refinery and Petrochemicals Integrated Development project in Pengerang.
“We are cautiously optimistic of better performance,” said Yung Sim, with regards to the outlook for financial year ending March 31, 2016 (FY16). In FY15, the group posted a 14% year-on-year (y-o-y) drop in revenue to RM563.8mil due to intense competition, sluggish steel prices and rampant dumping activities by Chinese steel mills.
Net profit for the 12 months under review dropped 45.6% y-o-y to RM7.05mil.
Yung Sim said steel prices seemed to have bottomed out and were more stable.
“Prices are less volatile compared with last year, although we think that prices will remain soft for some time.” Concerning dumping activities by Chinese steel mills, Yung Sim said the impact was mitigated by recent Government measures such as a safeguard duty on hot rolled steel plate imports for a period of three years.
Meanwhile, AYS Ventures executive director Jess Oh Pooi Foon said the group was aiming to increase revenue contribution from steel product exports from 10% to 25%.
“This will be helped by the weaker ringgit. Currently, about 90% of exports are bound for Singapore, with the balance to Vietnam, Thailand, Indonesia, Myanmar, China and the Middle East,” she said.
“As a trading company, we are flexible in managing our stock and adjusting quickly to market demand.” About 90% of the group’s turnover is from its distribution division, with the balance derived from manufacturing.
