Press Metal’s journey is guided by our vision to be a sustainable integrated aluminium company. Our low-carbon aluminium brand, GEMTM, exemplifies our commitment to sustainability in action, and continues our progress towards operational excellence. The cover is inspired by the iconic shape of the GEMTM logo. It is a reflection of our expansion as a forward-thinking organisation – integrating environmental responsibility with the aspiration to grow our operations’ footprint across the regions.
INSIDE THIS REPORT 89 About This Sustainability Report 90 Overview of Our Sustainability Approach 91 Key ESG Highlights 2024 92 Sustainability Journey and Net-Zero Aspirations 94 Message from Group CEO 96 Approach to Sustainability 99 Sustainability Achievements 101 Sustainability Targets and 2024 Performance 103 Upholding Good Governance and Economic Resilience 132 Caring for the Planet 171 Empowering Our People and Enriching Our Communities 217 Independent Limited Assurance Report 221 GRI Content Index 227 SASB Content Index 228 Bursa Malaysia Three-Year Sustainability Performance Data SECTION 5 DELIVERING SUSTAINABLE VALUE FOR OUR STAKEHOLDERS 233 Financial Statements SECTION 6 FINANCIAL STATEMENTS SECTION 7 ADDITIONAL INFORMATION 339 List of Properties 340 Analysis of Shareholdings 344 Notice of Annual General Meeting 353 Statement Accompanying Notice of Annual General Meeting 354 Glossary • Proxy Form 42 Corporate Information 44 Profile of Our Board of Directors 50 Profile of Our Key Senior Management, Key Operating Management and Country Heads 53 Corporate Governance Overview Statement 75 Directors’ Responsibility Statement 76 Additional Compliance Information 77 Audit Committee Report 84 Statement on Risk Management and Internal Control SECTION 4 EFFECTIVE STEWARDSHIP THROUGH GOOD GOVERNANCE 22 The Market We Operate In 27 Engaging with Our Stakeholders 31 Material Matters at Our Core 33 Managing Our Risks and Opportunities Effectively 37 Fuelling Growth Through Our Strategic Priority Areas 40 Our Value Creation Model SECTION 3 CHARTING THE PATHWAY TOWARDS EXCELLENCE 12 Chairman’s Statement 16 Management Discussion and Analysis by Group CEO SECTION 2 MESSAGES FROM OUR LEADERS 2 About This Report 4 Who We Are 4 Our Integrated Value Chain 6 Our Key Strengths 8 Key Highlights 2024 10 Awards and Accolades 11 Associations and Memberships SECTION 1 PRESS METAL AT A GLANCE
2 Press Metal Aluminium Holdings Berhad SECTION 1 • PRESS METAL AT A GLANCE The Integrated Annual Report (“IAR”) 2024 of Press Metal Aluminium Holdings Berhad (“PMAH” or “the Company”) and its subsidiaries (collectively referred to as “Press Metal” or “the Group”) represents an important milestone in our integrated reporting journey. This IAR 2024 reflects our dedication to transparency, accountability, and creating value for all stakeholders. IAR 2024 provides a comprehensive account of our financial and non-financial performance, detailing our operational achievements, governance practices, strategic priorities, sustainability initiatives and challenges, and future prospects. It has been prepared in alignment with the Guiding Principles and Content Elements of the Integrated Reporting (<IR>) Framework developed by the Value Reporting Foundation (“VRF”), ensuring adherence to global standards in corporate reporting. Through this report, we demonstrate how sustainability is integrated into our operations and how it strengthens our business resilience. Press Metal remains committed to generating long-term value for stakeholders while addressing the opportunities and challenges of an evolving global landscape. SCOPE AND BOUNDARIES IAR 2024 covers the reporting period from 1 January 2024 to 31 December 2024 (“FYE2024”), unless otherwise stated, encompassing disclosures of the Group’s activities, including those of its subsidiaries, joint operations, joint ventures, and associates, where applicable. We have adopted an integrated reporting approach to demonstrate our commitment to delivering value across short-, medium- and long-term. This approach reflects the interconnected nature of our financial and operational performance, stakeholder relationships, and sustainability objectives, focusing on the following key areas: • Business Performance: The IAR 2024 offers a holistic analysis of the financial and non-financial performance, along with valuable insights into our growth prospects (refer to pages 12 to 21 for further details). • Stakeholder Engagement: Meaningful stakeholder relationships are prioritised and their expectations are actively integrated into our business strategies (refer to pages 27 to 30 for further details). • Materiality: The identification and prioritisation of key material matters provides us with a holistic view of global trends, industry developments, and risks that could significantly impact the Group’s performance (refer to pages 31 to 32 for further details). • Key Capitals: The identification of inputs, outputs, and outcomes associated with each of the capitals in our business model, collectively contribute to value creation across the Group’s ecosystem, aligning with our strategic objectives (refer to pages 40 to 41 for further details). MATERIALITY Detailed disclosures on the assessment and determination of our material topics are provided in the Material Matters at Our Core section of the IAR 2024. The method for identifying material topics is detailed on page 31 of this IAR 2024. Our approach to materiality focuses on two (2) key criteria: • Topics deemed influential for financial value creation; and • Topics that are significant to our stakeholders and contribute to indirect value creation. REPORTING PHILOSOPHY & FRAMEWORK This IAR 2024 serves as our primary report communicated to our stakeholders. We have prepared the IAR 2024 in reference to the following frameworks, standards, and guidelines: Key Frameworks/ Standards/ Guidelines Applied IAR 2024 Sustainability Report 2024 (“SR 2024”) Corporate Governance Report 2024 (“CG Report 2024”) Financial Statements for FYE2024 Integrated Reporting <IR> Framework Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Companies Act (“CA”) 2016 Malaysian Code of Corporate Governance (“MCCG”) 2021 Corporate Governance Guide (4th Edition) of Bursa Malaysia Berhad Bursa Malaysia Sustainability Reporting Guide (3rd edition) Global Reporting Initiative (“GRI”) Universal Standards 2021 United Nations Sustainable Development Goals (“UN SDGs”) FTSE4Good Bursa Malaysia Index’s Environmental, Social and Governance indicators National Sustainability Reporting Framework (“NSRF”) United Nations Global Compact’s (“UNGC”) Ten Principles Sustainability Accounting Standards Board (“SASB”) Sector-Specific Disclosures Aluminium Stewardship Initiative (“ASI”) Performance Standard Version 3 (“PS v3”) International Financial Reporting Standards (“IFRS”) Malaysian Financial Reporting Standards (“MFRS”) ABOUT THIS REPORT
3 Integrated Annual Report 2024 SECTION 1 • PRESS METAL AT A GLANCE FORWARD-LOOKING STATEMENTS Forward-looking statements regarding the Group’s financial position, prospects, targets, and business strategies are presented in this IAR 2024. These statements are developed based on reasonable assumptions and current circumstances at the time of reporting. However, they are not guarantees of future performance, as actual outcomes may vary due to unforeseen events, risks, uncertainties, and other influencing factors. Readers are encouraged to exercise caution and avoid placing undue reliance on these forward-looking statements, as they are subject to change and potential deviation from projected outcomes. ASSURANCE The financial disclosures and reports presented in the Financial Statements section of this IAR 2024 have undergone independent auditing by KPMG PLT. To uphold the consistent accuracy and reliability of our IAR 2024, we have enlisted KPMG PLT, to provide limited assurance on the ten (10) selected sustainability indicators, which includes the following: 1. Percentage of directors by gender and age group (%) 2. Percentage of operations assessed for corruption-related risks (%) 3. Confirmed incidents of corruption and action taken (number) 4. Total energy consumption (million gigajoules) 5. Number of work-related fatalities (number) 6. Lost time incident rate (“LTIR”) (rate) 7. Number of substantiated complaints concerning human rights violations (number) 8. Number of substantiated complaints concerning breaches of customer privacy and losses of customer data (number) 9. Scope 1 Greenhouse Gas (“GHG”) emissions (kilotonnes of CO2e) 10. Scope 2 GHG emissions (kilotonnes of CO2e) In addition to external assurance, Press Metal has conducted an internal audit review on the sustainability performance data and processes. This internal review complements the third-party assurance, reinforcing our dedication to ensuring the reliability and transparency of our disclosures. BOARD RESPONSIBILITY STATEMENT The Board of Directors (“Board”) of PMAH acknowledges its responsibility in ensuring the integrity and credibility of this IAR 2024. The IAR 2024 has been prepared in accordance with good governance practices and guided by the Integrated Reporting <IR> Framework. In the Board’s assessment, the IAR 2024 sufficiently covers material matters relevant to the Group’s performance and value creation. The IAR 2024 has been approved by the Board. REPORTING SUITE Scan the QR code or visit our website at www.pressmetal.com to read our IAR 2024. FEEDBACK & CONTACT POINT We are committed to continuously improving the quality of our reporting. Your feedback and input are greatly appreciated as we continue to improve our reporting journey. If you have any comments on the IAR 2024 or require further clarification, please email: corpcomm@pressmetal.com. Our Six (6) Capitals Financial Capital F Intellectual Capital I Natural Capital N Manufactured Capital M Human Capital H Social and Relationship Capital SR Our Material Matters Upholding Good Governance and Economic Resilience Our Stakeholders Suppliers/ Contractors/ Service Providers/ Consultants Capital Providers (Financiers, Shareholders, Investors) Key Senior Management Business Partners Employees Customers/ Distributors Local Communities Media/ Analysts Government/ Regulatory Authorities Caring for the Planet Empowering Our People and Enriching Our Communities NAVIGATION ICONS About This Report M1 Economic and Financial Resilience M5 Product Quality and Customer Satisfaction M3 Compliance Reporting and Disclosure M7 Risk Management M6 Sustainable Manufacturing M2 Business Ethics and Corporate Governance M4 Responsible Sourcing M8 Customer Data Privacy and Information Technology M9 Climate Change M10 Waste M12 Water and Effluents M16 Diversity and Inclusivity M14 Occupational Health and Safety M15 Human Rights M18 Community Management M13 Biodiversity M17 Talent and Labour Management M11 Material Stewardship
4 Press Metal Aluminium Holdings Berhad SECTION 1 • PRESS METAL AT A GLANCE WHO WE ARE Over the past three (3) decades, Press Metal has grown and evolved into the largest integrated aluminium producer and a prominent aluminium extruder in Southeast Asia (“SEA”), serving key industries such as infrastructure, transportation, construction, and consumer goods across global markets. Listed on the Main Market of Bursa Malaysia and a constituent of the FTSE Bursa Malaysia Kuala Lumpur Composite Index, Press Metal Aluminium Holdings Berhad is featured in several indices, including MSCI Malaysia Index, and MSCI Malaysia Islamic Index. Our dedication to sustainability and transparency is further underscored by our inclusion in the FTSE4Good Bursa Malaysia Index since FYE2022. The Group’s core operations focus on the manufacturing and trading of primary, value-added, and extruded aluminium products. Headquartered in Selangor, Malaysia, it has midstream production facilities in Sarawak and Johor, and downstream production facilities in Selangor and Negeri Sembilan, as well as Guangdong, China. Our global presence is strengthened by distribution offices in Australia, the United Kingdom, and the United States (“US”), enabling us to meet the growing demands of both local and regional markets. As part of our long-term strategy for growth and operational excellence, Press Metal continues to strengthen its integrated value chain by investing in upstream business operations, ensuring raw material security, fostering sustainable growth, and delivering value to our stakeholders. OUR INTEGRATED VALUE CHAIN OUR VISION To provide products and solutions for a sustainable future. Smelting • Press Metal Bintulu Sdn. Bhd. • Press Metal Sarawak Sdn. Bhd. Casting • Press Metal Aluminium Rods Sdn. Bhd. Bauxite Mining & Alumina Refining* • PT Bintan Alumina Indonesia • Worsley Alumina Unincorporated Joint Venture Carbon Anode Manufacturing* • Shandong Sunstone & PMB Carbon Ltd., Co Note: * joint investments UPSTREAM MIDSTREAM INTEGRATED ALUMINIUM PRODUCTION
5 Integrated Annual Report 2024 SECTION 1 • PRESS METAL AT A GLANCE Business Establish partnerships and deliver incremental value to stakeholders B Environment Mindfully consume and source natural resources to deliver our aluminium products E Society Enrich the communities we operate in S Talent Enable an inclusive workplace and protect the social welfare of our people T Business Acumen The ability to facilitate strategic decision-making that drives value creation for the Group and its stakeholders. Global Outlook To drive business growth with a global perspective and to progressively expand into a top industry player. Social Responsibilities Upholding our commitment as a responsible corporate citizen through continuation of contribution to the advancement of the industry, community, and society. Quality Excellence A continuous commitment to achieving, maintaining, and enhancing product quality in line with industry standards and client expectations. Focused Teamwork Leveraging the combined expertise and skills of our workforce to achieve the Group’s goals and objectives. OUR MISSION OUR CORPORATE VALUES • PMB Aluminium Sdn. Bhd. • Press Metal International Limited • Press Metal International Technology Ltd. • Press Metal UK Limited • Press Metal Aluminium (Aus) Pty. Ltd. • Press Metal North America Inc. • PMB Aluminium Sabah Sdn. Bhd. • PMB Central Sdn. Bhd. • PMB Eastern Sdn. Bhd. • PMB Northern Sdn. Bhd. TRADING AND DISTRIBUTION DOWNSTREAM Aluminium for a Sustainable Future Infrastructure Electronics Packaging Transportation Who We Are
6 Press Metal Aluminium Holdings Berhad SECTION 1 • PRESS METAL AT A GLANCE OUR KEY STRENGTHS Smelting Capacity 1.08 million MT Extrusion Capacity 230k MT INTEGRATED ALUMINIUM OPERATIONS RESPONSIBLE ALUMINIUM PRODUCTION • As the largest integrated aluminium producer in SEA, we operate with a robust midstream smelting capacity of 1.08 million metric tonnes per annum and a downstream extrusion segment capable of producing 230,000 metric tonnes per annum. These capacities position us at the forefront of the aluminium industry in the region. • In our upstream investments, we have holdings in two (2) alumina refineries – PT Bintan Alumina Indonesia (“PT BAI”) in Indonesia and the Worsley Alumina Unincorporated Joint Venture in Australia. In September 2024, we announced an equity participation of 80% in a new alumina refinery, PT Kalimantan Alumina Nusantara (“PT KAN”) in Indonesia, which is expected to be completed by 2027. • Our upstream expansion is expected to reinforce and continuously strengthen our leading position as the largest smelter in SEA and boost our competitive edge across the aluminium value chain. It is an effective approach towards expanding our upstream presence while ensuring higher self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations. This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency. • Additionally, we have also invested in Shandong Sunstone & PMB Carbon Ltd., Co in China to secure a stable and reliable supply of carbon anodes. Together, these upstream investments strengthen our supply chain resilience and operational efficiency. • As the largest integrated aluminium producer in SEA, our substantial growth has allowed us to serve a diverse customer base not only in the region but across Europe, US, Asia-Pacific and Oceania, underscoring our capabilities to meet the varied demands of global markets. • Consistently operating well below the threshold of 11 metric tonnes of CO2e per metric tonne of aluminium (Mine to Metal Emissions intensity), our smelting facilities comply with the GHG emissions intensity benchmark established by the ASI. • In recognition of our dedication to sustainable aluminium manufacturing, our smelting facilities in Sarawak — Press Metal Bintulu Sdn. Bhd. (“PMBtu”) and Press Metal Sarawak Sdn. Bhd. (“PMS”) — and our extrusion facility in China, Press Metal International Limited (“PMI”), have been awarded the ASI Performance Standard certifications. • As a low-carbon aluminium producer, Press Metal positions itself as the preferred supplier of choice for trending industries that actively seek sustainable materials for their products. • Our commitment to sustainability is exemplified through our GEM™ series, a low-carbon aluminium product that emits less than 4.0 metric tonnes of CO2e per metric tonne of aluminium (Scope 1 and Scope 2 GHG emissions), underscoring our dedication to delivering a sustainable solution to the global market. • Introduced CYCAL™ billet, which integrates GEM™ with high content of recycled aluminium, is offered in 50% (CYCAL™ 50) and 80% (CYCAL™ 80) recycled aluminium content respectively. The CYCAL™ series offers optimal balance of quality and reduced carbon emissions, further enhancing our commitment to sustainable aluminium production. Received Performance Standard certification from ASI for our smelting facilities, PMBtu and PMS, and extrusion facility, PMI Received Chain of Custody certification from ASI for our smelting facility, PMBtu
7 Integrated Annual Report 2024 SECTION 1 • PRESS METAL AT A GLANCE Our Key Strengths SUSTAINABILITY-DRIVEN APPROACH RENEWABLE AND RELIABLE RESOURCE • Sustainability is a core component of the Group’s strategy, and we take pride in our inclusion as a constituent of the FTSE4Good Bursa Malaysia Index, making our debut in June 2022 with a 4-star rating. • A testament to our commitment to sustainable business practices, our MSCI ESG rating has been upgraded from ‘A’ to ‘AA’, reinforcing the Group’s resilience in managing long-term, material environmental, social and governance (“ESG”) risks. Adding to this achievement, we proudly secured the Best Performer by Sector in the Industrial Products and Services category at The EDGE Malaysia ESG Awards 2024, further underscoring our dedication to excellence in sustainability. • Press Metal has established a sustainability framework that includes a Sustainability Roadmap with clear, time-bound targets and action plans. The sustainability efforts focus on advancing progress such as reducing GHG emissions, improving resource efficiency, and monitoring ecosystems. • Press Metal engages with associations such as ASI, UNGC, Federation of Malaysian Manufacturers (“FMM”), and the British Malaysian Chamber of Commerce (“BMCC”) to promote sustainability agendas, enhance industry presence and support global sustainability initiatives. • Press Metal’s smelting operations are strategically located in Sarawak, Malaysia, an area endowed with consistent rainfall and abundant river systems. These natural advantages provide an ideal environment for harnessing hydropower, enabling our smelting plants to utilise electricity predominantly from renewable hydroelectric sources. • Our smelting plants benefit from a renewable and reliable electricity supply, secured through long-term power purchase agreements with the Sarawak State’s power company. • Unlike many other smelters that are tied to floating-rate power purchase agreements that vary in accordance with market prices for coal or gas, we are not subject to fluctuations in our energy costs. A constituent of the FTSE4Good Bursa Malaysia Index Maintained a 4 star rating since our debut in June 2022 Our smelting operations derive a significant portion of electricity from hydro source
8 Press Metal Aluminium Holdings Berhad SECTION 1 • PRESS METAL AT A GLANCE KEY HIGHLIGHTS 2024 FTSE4Good ESG Rating Top 25% amongst PLCs in FBM EMAS with 4 star rating Revenue RM14,910 million PATAMI RM1,766 million Earnings per Share 21.43 sen
9 Integrated Annual Report 2024 SECTION 1 • PRESS METAL AT A GLANCE Key Highlights 2024 MSCI ESG Rating 2024 rating: AA Gearing Ratio 0.25 times Dividends RM577 million Total Equity RM10,305 million
10 Press Metal Aluminium Holdings Berhad SECTION 1 • PRESS METAL AT A GLANCE AWARDS AND ACCOLADES PRESS METAL ALUMINIUM HOLDINGS BERHAD The EDGE Malaysia ESG Awards 2024 Best Performer by Sector (Industrial Products and Services) MSCI MSCI ESG rating upgraded to “AA” from “A” RAM Sustainability Awards 2024 Top 3 Sustainability Performers - Platinum Award RAM Ratings Press Metal’s IMTN rating upgraded to AA1 from AA2 National Corporate Governance & Sustainability Award 2024 Overall Excellence Award UNGC Malaysia & Brunei Forward Faster Sustainability Awards 2024 Sustainable Supply Chain (Large Company) Shanghai Metals Market Information & Technology Co., Ltd Top 20 SMM China Industrial Aluminum Profile Enterprises Guangdong Manufacturers Association • Guangdong Top 500 Manufacturing Enterprises • Technological Innovation in Science and Technology Award (Second Prize) Guangdong Shipbuilding Industry Association Outstanding Innovative Technology Award (Special Aluminum Alloy Materials and Components in Offshore Engineering and Marine Vessels) PRESS METAL INTERNATIONAL LIMITED
11 Integrated Annual Report 2024 SECTION 1 • PRESS METAL AT A GLANCE ASSOCIATIONS AND MEMBERSHIPS Press Metal participates in both domestic and international industry associations to gain access to industry best practices and stay abreast of emerging trends and developments. By staying attuned to industry advancements, Press Metal is able to adopt best practices and measure our performance against that of our peers. This, in turn, enables us to develop relevant and resilient strategies to seize opportunities and address challenges within the aluminium industry, including those associated with climate change and human rights. Our involvement in industry associations aligns with the principles articulated in our Industry Association Participation Principles. For more details on these principles, please visit our website at https://www.pressmetal.com/investor-relations/ corporate-governance.php. Below are the international associations where Press Metal holds membership or actively engages: British Malaysian Chamber of Commerce A prominent networking chamber in Malaysia that offers business networking opportunities, knowledge exchange and bilateral trading assistance. We have expressed our commitment to supporting BMCC’s efforts to raise climate change awareness by endorsing BMCC’s Climate Action Pledge. United Nations Global Compact A voluntary initiative launched by the United Nations to encourage global businesses and organisations to adopt sustainable and socially responsible policies. It provides a framework for companies to align their strategies and operations with ten principles, covering human rights, labour, environment and anti-corruption. By joining the UNGC, we commit ourselves to implementing these principles and submitting an annual Communication on Progress update. Aluminium Stewardship Initiative A multi-stakeholder initiative dedicated to maximising the positive impact of aluminium through responsible production, sourcing and stewardship. ASI addresses sustainability challenges in the aluminium value chain and promotes transparency via its ASI Performance Standard and Chain of Custody. The following is a list of trade groups that Press Metal belongs to or is affiliated with: Malaysia • Federation of Malaysian Manufacturers - Member of the Environmental Management & Circular Economy Committee - Member of the Sustainable Development & Climate Change Committee • International Aluminium Institute • Sarawak Chamber of Commerce and Industry China • Alashan Society of Entrepreneurs and Ecology • China Aluminium Association • China Non-Ferrous Metal Industry Association • Foshan Nanhai Aluminium Profile Industry Association • Guangdong Association of Shipbuilding Industry • Guangdong Automobile Industry Association • Guangdong Society of Naval Architecture and Marine Engineering • MAYCHAM China Greater Bay • Sanshui District Aluminium Processing Industry Association • Shanghai Aluminium Trade Association
Press Metal Aluminium Holdings Berhad SECTION 2 • MESSAGES FROM OUR LEADERS 12 CHAIRMAN’S STATEMENT Resilient Growth, Future-Focused “We achieved strong performances across our refinery, smelting, and extrusion segments in 2024.” Datuk Yvonne Chia Independent Non-Executive Chairman We have expanded our investments in alumina assets to strategically secure our operational needs and support sustained growth. Expanded Alumina Investments Our MSCI ESG rating was upgraded from ‘A’ to ‘AA’, underscoring our commitment to responsible and sustainable business practices. MSCI Rating Upgrade Our CSR initiatives have positively impacted over 1,900 individuals through education, sports, social welfare, environment, sustainability and health. CSR Impact
Integrated Annual Report 2024 SECTION 2 • MESSAGES FROM OUR LEADERS 13 Chairman’s Statement DEAR VALUED STAKEHOLDERS On behalf of Press Metal Aluminium Holdings Berhad, I present to you our Integrated Annual Report for 2024. The IAR 2024 provides a concise review of our performance, strategic direction, and commitment to responsible growth. It highlights our financial and operational achievements, sustainability practices, and governance principles, demonstrating how we create value over the short-, medium-, long-term while keeping PMAH at the forefront of a dynamic market. PERFORMANCE HIGHLIGHTS We achieved strong performances across our refinery, smelting, and extrusion segments in 2024. Despite challenges, and a fire incident at Phase 3 of our Samalaju smelter, we successfully navigated a volatile macroeconomic environment and shifting metal markets to achieve a record profitability. By strategically strengthening our foothold in key priority markets, we successfully adapted to evolving trade flows and mitigated risks associated with alumina supply and price volatility. Higher contributions from value-added products and improved performance from our alumina manufacturing associate, PT BAI, further bolstered our overall results. MARKET DYNAMICS & STRATEGIC POSITIONING In 2024, the global aluminium market saw price fluctuations amid uneven economic performances across regions. While European demand was subdued, Asia’s resilience – driven by manufacturing relocations and lean inventories – spurred stronger regional demand. Steady growth in electric vehicles (“EVs”) and expansion of renewable energy infrastructure helped maintain prices at around USD2,500 per tonne by year-end. We remain cautiously optimistic of the opportunities arising from these developments. Our low-carbon aluminium production supports the growing demand for sustainable materials, and we continue to explore growth avenues through operational integration and economies of scale. At the same time, we remain mindful of evolving trade-related policies which continue to shape market dynamics and require careful navigation. Recognising the critical need for stable alumina supply, we expanded our alumina asset investments in Indonesia in 2024 through PT KAN. Our equity investment of RM1 billion over the next few years will strategically secure this essential input, ensuring operational stability and future growth. For FYE2024, we declared total dividends of 7.0 sen per share, representing a 33% payout ratio of PATAMI. This is a disciplined balance between funding our ambitions and providing shareholder returns. We manage a prudent financial framework, enabling us to invest in high-potential opportunities while sustaining shareholder returns. Our efficient cost structure and strong credit metrics support our growth ambitions. In recognition of our financial strength, RAM Ratings upgraded our RM5.0 billion IMTN Programme rating from AA2 to AA1 in FYE2024. FYE2024 FINANCIAL PERFORMANCE We delivered record financial results despite external volatilities, achieving: Revenue RM14.9 billion PATAMI RM1.8 billion increased by 45% year-on-year (“y-o-y”) Net Gearing 0.25 times (FYE2024) reduced from 0.40 times (FYE2023) Return on Capital 23.7% reflecting disciplined capital allocation
Press Metal Aluminium Holdings Berhad SECTION 2 • MESSAGES FROM OUR LEADERS 14 Chairman’s Statement GROWTH & VALUE CREATION Our growth over the years has been shaped by our adaptability to changing market conditions and navigate periods of uncertainty. With a customer-centric approach, operational discipline, and sustainable practices, we will endeavour to increase our market share of our low-carbon aluminium products. Our growth strategy is anchored on five (5) core values: Business Acumen, Global Outlook, Focused Teamwork, Quality Excellence, and Social Responsibility. This vision drives our investments in securing alumina supply, expanding vertical integration, and enhancing operational efficiencies. We continue advancing digital transformation, process optimisation and automation to boost efficiency and competitiveness. These investments enable us to consistently deliver innovative solutions that meet the evolving needs of our customers. SUSTAINABILITY & CIRCULAR ECONOMY At Press Metal, sustainability is embedded in our operations. In 2024, we advanced from a carbon-neutral ambition to a net-zero target by 2050, aligning with global climate goals. We have incorporated Scope 3 GHG emissions into our climate targets and participated in the Carbon Disclosure Project (“CDP”) to enhance transparency and accountability in our decarbonisation strategy. A key milestone in 2024 was the launch of our low-carbon aluminium brand, GEM™, produced primarily using renewable energy. Our GEM™ emits less than 4.0 metric tonnes of CO2e per metric tonne of aluminium (Scope 1 & 2 GHG emissions) — significantly lower than the industry average, measured within a cradle-to-gate boundary. This sustainable alternative supports industries prioritising green materials. We have also strengthened our sustainability efforts through: • The launching of a Scrap Recycling Project at Press Metal Sarawak in Mukah, increasing aluminium recycling. • Expanded rooftop solar capacity by 1.2 MW in 2024, with an additional 6.3 MW currently under installation across downstream entities to reduce reliance on non-renewable energy. • Advancing and progressing well in the carbon capture and utilisation (“CCU”) project through a collaboration agreement signed in 2024 with Xi’an Jiaotong University (“XJTU”), exploring innovative emission reduction solutions. Our commitment to sustainability is further reflected in our recognitions, acknowledging our proactive actions and management of material ESG risks: Recognised among the top 20 recipients of MSWG’s National Corporate Governance & Sustainability 2024 Excellence Award Maintained a four-star FTSE4Good rating for the third consecutive year MSCI ESG rating upgraded from “A” to “AA”
Integrated Annual Report 2024 SECTION 2 • MESSAGES FROM OUR LEADERS 15 Chairman’s Statement GOVERNANCE & COMMUNITY DEVELOPMENT We uphold the highest standards of integrity, accountability and transparency, ensuring our decisions and actions drive sustainable value and prioritises stakeholders’ interests. We integrate adaptability, innovation and sustainability into our strategic planning and acknowledge the need to foster collaboration with stakeholders to build mutual trust and shared success. Beyond strong governance, we are committed to uplifting the local community. In 2024, our CSR and social initiatives positively impacted more than 1,900 people, focusing on education, sports, culture, environment, health, and social development. A key project is the ongoing development of a new township at Samalaju, which provides better housing environment for employees and supports the local economy through engaging local contractors and local sourcing. CONCLUSION & ACKNOWLEDGEMENT As we look ahead, I am confident in our ability to execute our ambition to drive sustainable and profitable growth. However, uncertainties persist due to US tariff discussions, shifting global trade flows, and China’s economic challenges, making it difficult at the time of the report writing to assess the full impact. We are committed to achieving our climate goals through measurable targets, technological advancements and decarbonisation initiatives. With our innovation to develop green products, we are strengthening our position in the global market. I extend my sincere thanks to our management, employees, customers, our various stakeholders and the Board of Directors for their steadfast commitment and support. Together, we will excel and create value for all. Thank you. DATUK YVONNE CHIA Independent Non-Executive Chairman
Press Metal Aluminium Holdings Berhad SECTION 2 • MESSAGES FROM OUR LEADERS 16 MANAGEMENT DISCUSSION AND ANALYSIS BY GROUP CEO Resilience in Motion, Progress with Purpose “We aim to strike an optimal balance between economic returns and corporate responsibility so that both can advance in tandem for Press Metal.” Revenue RM14,910 million FYE2023: RM13,805 million EBITDA RM3,223 million FYE2023: RM2,551 million Profit Before Tax RM2,303 million FYE2023: RM1,646 million Tan Sri Dato’ Koon Poh Keong Group Chief Executive Officer
Integrated Annual Report 2024 SECTION 2 • MESSAGES FROM OUR LEADERS 17 FOREWORD BY GROUP CEO Throughout 2024, we navigated a rapidly evolving and dynamic macroeconomic landscape shaped by market volatilities, geopolitical tensions and policy uncertainties. Despite these external complexities, the strong foundation we have built over the years has enabled us to steer through headwinds successfully, achieving a record-breaking financial performance. Our agility, ability to adapt, low-carbon products and upstream integration have strengthened our position as SEA’s largest integrated aluminium producer. As we reflect on our achievements in 2024, we remain steadfast in our mission to create value for our stakeholders while contributing to a greener future. We aim to strike an optimal balance between economic returns and corporate responsibility so that both can advance in tandem for Press Metal. We have a clear roadmap to continue increasing our competitiveness in the global arena and we take proactive steps today to shape tomorrow’s opportunities. Management Discussion and Analysis by Group CEO KEY HIGHLIGHTS OF 2024 Record PATAMI of RM1.8 billion Achieved a 45% y-o-y growth, driven by strong smelting performance and higher contributions from associate companies Continued ESG progress and recognition Upgraded MSCI ESG rating from ‘A’ to ‘AA’, underscoring our commitment to responsible and sustainable business practices Introduction of GEM™, our low-carbon aluminium brand Produced with a carbon footprint significantly lower than the industry average, measured within a cradle-to-gate boundary, reinforcing our commitment in sustainable aluminium solutions Higher contribution from Value-Added Products Value-Added Products (“VAPs”) which generally provide higher margins accounted for 47.9% of total sales volume in FYE2024, up from 40.6% in the previous year Strategic expansion in upstream alumina refineries Strengthening long-term alumina supply security to reduce reliance on third-party sources The global aluminium market in 2024 was marked by significant volatility, shaped by a complex interplay of geopolitical tensions, shifting trade policies and supply chain disruptions. Aluminium prices began the year above USD2,100 per tonne, reaching a peak of circa USD2,700 per tonne in May. This surge was driven by continuous demand from industries tied to renewable energy, rising raw material costs and restocking activities. However, a weaker-than-expected economic data combined with limited policy support for industrial growth led to a price correction in mid-2024. Prices rebounded to above USD2,500 per tonne by the end of the year, buoyed by lower US interest rates and persistent supply constraints in both the aluminium and alumina markets. The global transition towards a low-carbon economy has emerged as a defining trend, significantly influencing the aluminium industry. As industries worldwide accelerate their decarbonisation efforts, the demand for sustainable aluminium has surged. Aluminium’s unique properties — lightweight and recyclable — make it an essential material in renewable energy infrastructure, EVs and energy-efficient buildings. This shift towards sustainability has created a growing preference for low-carbon aluminium, positioning Press Metal advantageously in the market. Our commitment to producing low-carbon aluminium, powered by renewable hydropower, aligns seamlessly with the increasing demand for environmentally friendly materials. Trade tensions and tariff policy changes have also reshaped the global aluminium landscape with the implementation of tariffs and imposition of restrictive policies toward certain countries. Although these may complicate supply chain and metal flow, we will seek to leverage upon these shifting dynamics to our advantage. The “China Plus One” strategy is expected to spur the development of a new supply chain ecosystem in SEA. This has opened up opportunities for alternative material supply sources, and Press Metal is strategically positioned to capitalise on these shifts. Elevated alumina prices posed a significant challenge for aluminium producers worldwide in 2024. Although alumina prices began to ease towards the end of the year, risks remain, particularly in bauxite sourcing due to policy changes and supply disruptions. In response, Press Metal has intensified its focus on leveraging upstream alumina assets and enhancing vertical integration capabilities. By securing a stable supply of raw materials and optimising our production processes, we aim to mitigate the impact of price volatilities and strengthen our operational margins. INDUSTRY TRENDS & MARKET DYNAMICS
Press Metal Aluminium Holdings Berhad SECTION 2 • MESSAGES FROM OUR LEADERS 18 Management Discussion and Analysis by Group CEO Despite these challenges, the aluminium market remains balanced as new supply is limited and demand is supported by rising investments in green sectors such as renewable energy infrastructures, EVs, grid infrastructure and battery storage. These emerging applications, alongside traditional uses in construction and transportation, continue to drive demand for aluminium. Press Metal is well-positioned to ride on this growth, thanks to our low-carbon aluminium solutions, integrated production capabilities and efficient cost model. By aligning our strategies with the broader industry trends, we are enhancing our competitiveness and ensuring long-term resilience in an increasingly dynamic market. We have made significant progress in bolstering our upstream integration in recent years, particularly for alumina, the crucial raw material for aluminium production. PT BAI now boasts a capacity of two (2) million tonnes per annum with plans to expand by another two (2) million tonnes within two (2) years, bringing capacity to a total of four (4) million tonnes per annum. PT BAI, via its holding company, Nanshan Aluminium International Holdings Ltd. has also recently completed its Initial Public Offering and is now listed on the Hong Kong Stock Exchange, raising funds for its expansion. In September 2024, we announced equity participation of 80% in a new alumina refinery, PT KAN in Indonesia. The refinery is expected to come on stream in two (2) years, with an annual production capacity of 1 to 1.2 million tonnes per annum with potential to increase this capacity in the future. Our upstream expansion will increase our alumina leverage substantially and boost our competitive edge across the aluminium value chain. It is an effective approach towards ensuring higher self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations. This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency. With the close proximity of the refineries in Indonesia to our smelters in Sarawak, we anticipate cost savings that will further optimise our overall operations. Strengthening Upstream Presence Our downstream extrusion segment has strategically positioned itself to harness the immense potential of the renewable energy sector by delivering innovative, product-based solutions. In Malaysia, we have begun supplying and are also in the development phase with several new clients for solar panel frames. These advancements in providing extrusion solutions to the renewable energy sector highlight our capability to adapt to evolving market demands in downstream activities. The vast potential in this sector is further demonstrated by our recent Memorandum of Understanding (“MoU”) with the Bintulu Development Authority to develop a solar frame extrusion facility in Bintulu, Sarawak, which is expected to be operational by mid-2026. This project aligns with Press Metal’s broader vision to expand our low-carbon aluminium applications and reinforces our role in supporting global energy transition efforts. Harnessing Potential of the Renewable Energy Sector We are strengthening our position as a sustainable aluminium producer by forging strategic partnerships with global industry leaders. In 2023, we signed a five (5) year supply agreement with Daching Enterprise, one of the world’s top three (3) aluminium foil suppliers. Building on this momentum, we recently inked a multi-year contract with Novelis, the world’s largest aluminium recycler and a leader in low-carbon flat-rolled aluminium products. Under this agreement, we will be supplying our GEM™ low-carbon aluminium, further solidifying our role as a trusted partner in the global shift towards greener industrial practices. Partnerships with Global Industry Leaders The demand for low-carbon aluminium is growing rapidly, driven by automotive, packaging, renewable infrastructure and construction industries, as global brands increasingly prioritise sustainability in their supply chains. This shift is driven by regulatory pressures, consumer demand for environmentally responsible products and corporate commitments to achieving net-zero emissions. In sustaining the decarbonisation shifts, in 2024, we introduced our low-carbon aluminium under the brand name, GEM™, with a carbon footprint of less than 4.0 metric tonnes of CO2e emissions per metric tonne of aluminium (Scope 1 and Scope 2 GHG emissions). GEM™ offers a sustainable alternative for industries seeking to reduce their environmental impact without compromising on performance. Looking ahead, we aim to expand our low-carbon product portfolio to support our customers’ sustainability goals further. Low-Carbon Aluminium Solutions STRATEGIC FOCUS AREAS
Integrated Annual Report 2024 SECTION 2 • MESSAGES FROM OUR LEADERS 19 Management Discussion and Analysis by Group CEO As part of our long-term sustainability strategy, Press Metal remains committed to achieving net-zero emissions by 2050. In 2024, we made significant strides in our sustainability journey, with key achievements detailed in our Sustainability Report. Sustainability is deeply embedded in the Press Metal culture, guiding every decision and process across our operations. To further advance our sustainability goals, we are exploring innovative solutions, such as carbon capture and utilisation and adopting circular economy practices to minimise emissions and waste. These initiatives are integral to reducing our environmental impact and ensuring the long-term sustainability of our operations. Progress Towards Net-Zero 2050 These partnerships reflect our commitment to collaborating with like-minded organisations that share our vision of being responsible stewards to our living environment. By aligning with global leaders, we are advancing our sustainability goals and contributing to broader global efforts towards decarbonisation. As we move forward, we will continue seeking and nurturing partnerships with companies that prioritise innovation, sustainability and responsible production while supporting the global transition to a low-carbon economy. The year presented several operational challenges, including rising alumina prices driven by temporary supply disruptions and elevated freight costs exacerbated by port congestion and geopolitical tensions. The surge in alumina price has impacted all aluminium producers, however, our cost structure was cushioned from the full effect of the market price due to our lower-priced alumina inventory. Alumina prices started to ease towards year-end. Looking ahead, the expansion of refinery capacity in Indonesia, India and China is expected to increase global alumina production. This increase in supply is driving down high alumina prices, alleviating pressure on aluminium production costs. In September 2024, our operation faced an unexpected challenge with a fire incident at Phase 3 of our Samalaju smelter. We are grateful that our robust safety protocols and swift evacuation measures have ensured no injuries or fatalities to any workers. The incident primarily affected our sales volume in the final quarter of 2024, caused by lower output from Phase 3 during the restoration period. We were swift in our recovery efforts, with full restoration of the affected pots back in production by February 2025. The financial impact was minimised as the affected assets were adequately covered by insurance. Amid these challenges, we made significant strides in enhancing operational efficiency through resource optimisation initiatives. By streamlining processes and improving resource allocation, we have enhanced performance across our facilities. These efforts not only strengthen our resilience in the face of external pressures but also reinforce our commitment to sustainable and efficient operations. As we move forward, we remain focused on maintaining operational excellence while continuing to adapt to the dynamic market environment. Read more about operational and other risks and opportunities in the Managing Our Risks and Opportunities Effectively. UPDATES ON OPERATIONAL ACTIVITIES Financial Year Ended 31 December (RM’million) 2024 2023 2022 2021 2020 Revenue 14,910 13,805 15,683 10,995 7,476 EBITDA 3,223 2,551 2,768 2,045 1,239 Profit before tax 2,303 1,646 1,952 1,443 655 Profit after tax 2,125 1,518 1,767 1,295 587 Profit attributable to shareholders 1,766 1,215 1,407 1,002 460 Total assets 16,634 15,366 15,316 14,211 11,934 Shareholders’ funds 8,476 6,933 6,637 3,873 3,995 Total equity 10,305 8,396 8,005 4,920 4,890 Borrowings 4,084 4,628 5,093 6,370 5,148 Net Debt/ Equity Times 0.25 0.40 0.56 1.20 0.91 Net earnings per share* Sen 21.43 14.75 17.16 12.41 5.69 Dividend per share* Sen 7.0 7.0 6.0 3.4 2.1 Note: Adjusted retrospectively to reflect the 1 for 1 bonus issue exercise completed in April 2021. REVIEW ON FINANCIAL PERFORMANCE
Press Metal Aluminium Holdings Berhad SECTION 2 • MESSAGES FROM OUR LEADERS 20 Management Discussion and Analysis by Group CEO In FYE2024, we achieved revenue of RM14.9 billion and record profit after tax, RM2.1 billion, marking an increase of 8% and 40.0% respectively compared to FYE2023. These growths were primarily driven by higher realised aluminium prices during the year compared to the previous year. The smelting segment remains the largest contributor of our revenue and profitability and the London Metal Exchange (“LME”) aluminium prices and premiums continue to play a pivotal role in shaping our financial performance. To mitigate the impact of price volatility, we continued our practice of employing partial forward hedging strategies for our production. This approach helped stabilise our revenue streams and provided a buffer against market fluctuations. Alumina, pre-baked carbon anodes and electricity make up the primary manufacturing costs of our smelting operations. In 2024, fluctuations in raw material prices, particularly alumina, driven by global production and supply chain disruptions, have posed significant challenges to the aluminium industry. The average market price of alumina for the year was USD501 per tonne – approximately 21% of the average aluminium price in 2024 as compared to 15% in 2023. To address these challenges, Press Metal is increasing the investment on upstream alumina assets and strengthening vertical integration capabilities to mitigate raw material price volatility and bolster resilience against market uncertainties, aiming to optimise operational margins. The price for pre-baked carbon anode was relatively stable in 2024, with market prices within the RMB4,200 to RMB4,500 range. The average market price in 2024 was 16% lower compared to average price in 2023. In terms of electricity, our smelting plants benefit from the strategic location within the Sarawak Corridor of Renewable Energy. This enables us to access to a stable and cost-effective electricity supply, predominantly generated from hydropower. Our long-term power purchase agreements provide cost stability as compared to price fluctuations of coal and gas that affect many other smelters globally. This sustainable energy model not only supports our operational efficiency but also aligns with our commitment to low-carbon aluminium production. By optimising our cost structure and leveraging renewable energy, we continue to strengthen our competitive edge in the global aluminium industry while advancing our sustainability goals. Our total borrowings decreased by 12%, from RM4.6 billion in FYE2023 to RM4.1 billion in FYE2024. The decrease in borrowings resulted from higher repayment of borrowings on the back of strong cash flow generation from operations. As a consequence, our net gearing ratio has decreased significantly, from 0.40 times in FYE2023 to 0.25 times in FYE2024. Revenue A total dividend of RM576.8 million, or approximately 33% of PATAMI, was declared in respect of FYE2024. Moving forward, we will continue to reward shareholders for their steadfast support subject to fulfilling our profitability, capital expenditure and overall liquidity requirements. Dividends In FYE2024, our profit before tax saw a significant increase of 40%, reaching RM2.3 billion. This improvement was driven by a combination of factors, including higher revenue, repayment of borrowings which reduced our net finance costs and stronger performance from our associate companies. The Group’s financial performance in the second half of FYE2024 was impacted by the depreciation of the USD against the Malaysian Ringgit. A significant portion of our revenue, trade receivables and borrowings are denominated in USD and this led to foreign exchange losses, which partially offset our operational gains. Despite this challenge, we achieved a robust 45% increase in PATAMI, which rose to RM1.8 billion in FYE2024. Profitability Costs Borrowings & Gearing Total Borrowings RM4.1 billion Net Gearing Ratio 0.25 times
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