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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