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New Tax on Aluminium to Hit Press Metal Profits

Metal News - Published on Tue, 12 Nov 2019

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The Sarawak state government’s proposed 1% State Sales Tax on the exports of aluminium products starting from January 2020 will erode net profit of Press Metal Aluminium Holdings Bhd. Based on AmInvestment Bank Bhd’s estimates, the new tax will cost Press Metal MYR 64 million and MYR 89 million in FY20 & F21 eroding FY20-21F net profit forecasts by 6-8%. Bank said “We are keeping our earnings forecasts for now as we believe the company is in the midst of seeking clarification from the state government on the matter.”

Meanwhile, AmInvestment Bank maintained its assumption on aluminium average selling price of USD 1,800 to USD 2,000 per tonne for FY19-21F on the back of higher projected production growth of six to seven per cent versus projected consumption growth of five per cent in China in 2019 and alumina price of USD 390 to USD 430 per tonne backed by the prevailing supply shortage in global alumina production.

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Posted By : Rabi Wangkhem on Tue, 12 Nov 2019
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