SEO Version
Business Review
RESOURCES
2012 was an extremely tough year for
the Malaysia Smelting Corporation
(MSC) Group. Due to the Indonesian
Government (GOI)’s deferment of
its decision on the extension of PT
Koba Tin’s Contract of Work (CoW)
which expired after 31 March 2013,
MSC decided to make a substantial
impairment provisionof RM145.1million
in its 2012 full year results. The adverse
impact on MSC’s results reflects the
extremely difficult challenges in doing
business in Indonesia. Nevertheless,
despite this substantial provision, MSC’s
underlying business and balance sheet
still remain in good health.
Amid these unprecedented challenges
in Indonesia and the continuing volatility
in the global commodities market, MSC
delivered mixed results with an overall
loss of RM62.7million before exceptional
losses compared with a pre-tax profit
of RM116.4 million before exceptional
losses in 2011. After providing for
exceptional items of RM145.7 million,
the MSC Group recorded a loss before
tax of RM208.4 million.
The fall in commodity prices in 2012
also dragged down the price of tin
metal which averaged USD21,100 per
tonne, about 19.2% lower compared
with USD26,100 per tonne in 2011.
MSC’s turnover decreased by 24.8% to
RM2.3 billion in 2012 from RM3.1 billion
in 2011 due to lower sales volume on
the back of lower tin prices.
In spite of the overall loss, MSC’s cash
positionremainshealthy.Netcashgenerated
from operating activities in 2012 was
positive, totalling RM64.2 million. It also
reduced its bank borrowings by RM126.4
million in 2012. MSC’s cash balance as
at the end of 2012 was RM139.1 million,
and the MSC Group has sufficient bank
credit facilities to finance its ongoing
international tin smelting business and
mining operations.
TIN SMELTING AND
MINING OPERATIONS
The Malaysian operations continued to
perform well and delivered satisfactory
profits despite lower tin prices and
challenges in the supply chain of tin
concentrates in Central Africa. The
Open pit mine at Rahman Hydraulic Tin (RHT)
T R A N S
F O R M
AT I ON
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