Southern Alliance Mining full-year profit tumbles 30% to RM62.1m on tax expenses

Singapore

HIGHER taxes took a toll on the full-year showing of Southern Alliance Mining (SAM), in the iron-ore producer's first set of results since its initial public offering (IPO) in June this year.

Net profit for the Malaysia-based firm fell 30 per cent to RM62.1 million (S$20.5 million) for the full year ended July 31, from RM88.2 million a year ago. This was mainly due to a tax expense of RM24.9 million this year, versus a tax benefit of RM27.9 million for FY2019.

Earnings per share stood at 12.69 sen for the full year, down from 18.05 sen in the preceding year. This was derived from the assumption that SAM's restructuring exercise, the grant of equity-settled, share-based payment of three million shares in relation to IPO expenses, as well as the issuance of 56 million new shares pursuant to the IPO had been completed as at the end of the respective financial years, the company noted.

Revenue rose 34 per cent to RM254.2 million, from RM189.1 million a year earlier, driven by an increase in sales volume and higher average selling prices, SAM said.

"While Covid-19 has had a substantial impact on various economies in the world, governments economic and stimulus policies in response to the disaster pointed more to a dynamic, and mostly positive impact on the iron ore price," added SAM.

The group has proposed a final dividend of 0.6 Singapore cent per share for fiscal 2020, subject to shareholders' approval at an upcoming annual general meeting to be convened. No dividend was declared last year.

On June 26, SAM made its debut on the Singapore Exchange's Catalist board at S$0.26, up S$0.01 or 4 per cent above its IPO price of S$0.25. The counter then ended the day at S$0.27, 8 per cent above its IPO price.

SAM's IPO comprised 56 million new shares and 20 million vendor shares, representing about 15.5 per cent of its enlarged post-IPO share capital of 489 million shares.

The firm's placement of 76 million shares was fully subscribed, netting it S$19 million in gross proceeds, the company said previously.

SAM shares ended at S$0.30 on Friday, up S$0.02 or 7.1 per cent following its results announcement.