Malaysia-based steelmaker Ann Joo Resources (AJR) has announced a net profit of MYR 6.21 million ($1.50 million) for the fourth quarter of last year, compared with a net profit of MYR 19.52 million recorded in the corresponding period of the previous year. The company reported a net loss of MYR 99.98 million ($24.25 million) for 2020, compared to a MYR 89.86 million net loss in 2019.
AJR also reported a sales revenue of MYR 539.42 million ($130.84 million) in the fourth quarter, down by 10.6 percent year on year, due to lower sales tonnages for both the domestic and export markets. For 2020, the company’s sales revenue totaled MYR 1.89 billion ($458.73 million) for 2020, compared to MYR 2.22 billion in 2019. Lower revenue in 2020 was mainly driven by lower domestic sales tonnage for the full year, and lower average selling prices during the first three quarters of the year.
The company anticipates 2021 to be a challenging year for the steel industry. AJR stated that the domestic steel demand outlook remains uncertain amid the impact of the coronavirus on the pace of construction activity.
According to the company’s statement, AJR will continue to focus on exports, in view of the expected continued demand from China and Southeast Asian markets. Ann Joo will strive to maximize its earnings potential for the year by proactively aligning its market strategies to capture the opportunities in export markets and focusing on productivity improvements as well as on cost-optimization initiatives.
Late last week, a deal for 30,000 mt of ex-Malaysia 3SP billet, from Ann Joo, according to sources, was confirmed to China at $575/mt FOB, with the freight assessed at $35-40/mt. The local price increase in China is making this market attractive for ASEAN suppliers, Malaysia in particular. “Prices are on the rise [in China], so if suppliers can sell at $620/mt CFR and above to China, they will not pay attention to Southeast Asia,” a local trader said.