Analysts: Expect no surprises for Press Metal’s upcoming 1Q24

Analysts: Expect no surprises for Press Metal’s upcoming 1Q24

KUCHING (April 5): Press Metal Aluminium Holdings Bhd (Press Metal) will likely record ‘flattish’ financial results for the first quarter of 2024 (1Q24) given the current subdued spot aluminium price environment, analysts observed.

Press Metal’s 1Q24 financial results are expected to be released at the end of May.

“We expect core earnings for 1Q24E at RM315 million to RM365 million (4Q23: RM328.4 million), barring any unforeseen swings in its cost structure.

“This is estimated from a slightly higher q-o-q LME aluminium spot price of average US$2,243 (RM10,647) per tonne in 1Q24 (4Q23: US$2,228 per tonne; 1Q23: US$2,439 per tonne),” said the research team at Maybank Investment Bank Bhd (Maybank IB) in a report.

It noted that Bloomberg Intelligence (BI) believes the global aluminium market’s surplus might narrow in 2024 before widening again in 2025 as Indonesia adds new smelting capacity totaling one million tonnes from Adaro and Nanshan Aluminium.

BI also forecasts demand growth from China and the rest of the world could both accelerate to 2.8 and 2.6 per cent in 2024, with EV production and solar-capacity expansion being key boosters.

Potential US interest rate cuts in 2024 may also create more demand for construction, which accounted for 22 per cent of 2023 global aluminium demand, it said.

All in, Maybank IB maintained its ‘hold’ call on the stock.


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