Rahman Hydraulic Tin (“RHT”)
RHT, which operates a hard-rock open-pit tin mine in the
State of Perak, maintained its position as the largest producer
of tin-in-concentrate in Malaysia, accounting for about 57%
of the country’s tin production in 2015.
All processing plants at the mine operated at full capacity
throughout the year, treating ore material mined from the
open-pit operation. The 2015 production volume of 2,196
tonnes of tin-in-concentrates was similar to that in 2014.
Profit before tax, at RM14.19 million, was 52% lower than
that recorded in 2014, mainly attributable to a 12% drop in
net realisable tin price compared to 2014. The second half
of 2015 was particularly challenging as tin prices plummeted
further but RHT was able to remain profitable as USD receipts
were converted to higher Malaysian Ringgit, and cost-cutting
measures were implemented.
OUTLOOK
The world economy and resource markets are expected to
continue to be challenging. While global commodity cycles are
unpredictable, the underlying operations of MSC are expected
to perform satisfactorily in 2016. MSC will continue to stay
focused on its cost rationalisation and optimisation efforts for its
core operating divisions to ensure that it remains profitable and
sustainable through the current challenging market environment.
Rahman Hydraulic open pit tin mine
Newly smelted tin ingots ready for delivery
Straits Trading’s 54.8%-owned resources subsidiary, Malaysia
Smelting Corporation Berhad (“MSC”) is the world’s second
largest supplier of refined tin.
Against the backdrop of a very volatile industry environment
marked by a severe and unprecedented down-cycle in the
global resource and commodity sectors, 2015 proved to be a
challenging year for MSC.
FINANCIAL PERFORMANCE
Depressed tin prices, coupled with volatile local currency
movements in 2015, materially impacted MSC’s financial results.
MSC registered a lower annual profit before tax of RM3.24 million
for the year ended 31 December 2015 (“FY2015”), compared with
a year ago. Its pre-tax results were impacted by an unfavourable
stock valuation adjustment arising from a lower tin price as at
end December 2015 and a net foreign exchange loss. After
deducting income tax expenses, MSC reported a net loss of
RM4.8 million in FY2015. FY2015 revenue was 23.5% lower at
RM1.46 billion from RM1.92 billion in 2014, primarily due to
lower sales quantity of refined tin and lower tin prices.
CORE OPERATIONS
MSC’s core operations comprising the international tin smelting
business at Butterworth and tin mining operation at Northern
Perak still managed to achieve a satisfactory performance despite
the difficult environment.
International Smelting Business
The Butterworth international smelting operations recorded
a pre-tax loss of RM 5.48 million in FY2015. The Butterworth
Smelter was smelting close to full capacity and earnings were in
line with expectations, but the bottom line was impacted by the
unfavourable stock valuation adjustment and foreign exchange loss.
Tin metal production decreased to 30,209 tonnes in 2015 from
34,971 tonnes in 2014 due to lower feed intake numbers. Tin
concentrate intake for smelting was slightly lower, but the
intake of crude tin for refining fell significantly.
YEAR IN REVIEW
RESOURCES
29
ANNUAL REPORT 2015
