- Press Metal is expected to post stronger earnings growth driven by appreciating US dollars, higher aluminium prices as well as strong demand from Asia ex-China.
- Last year, aluminium prices recovered strongly by 16 percent to US$1,733 a tonne. Taking the effect of currency conversion into account, the prices recorded a 21 percent increase to RM7,775 a tonne.
- Press Metal stands to benefit from the recent appreciation of US dollar, as the bulk of its revenue is denominated in US dollars while only around 30 percent of its costs is denominated in US dollars.
- Accordingly to Kenanga Research, global demand for aluminium last year rose steadily to 4.9 million tonnes as of October 2016.
Significance: Kenanga Research believed that Press Metal’s net margins will continue to improve in 2017, on the back of US dollars appreciation, rising operational efficiency due to better full-year utilization as well as increasing volume of higher margin aluminium alloy products.