KUALA LUMPUR (July 21): Cycle & Carriage Bintang Bhd saw its net profit for the second quarter ended June 30, 2017 (2QFY17) more than halved to RM8.96 million from RM19.67 million a year earlier, due to lower revenue and higher finance cost-interest expense on borrowings.
Earnings per share (EPS) fell to 8.89 sen from 19.53 sen, its bourse filing today showed.
Cycle & Carriage said quarterly revenue fell 15.9% to RM355.44 million from RM422.75 million in 2QFY16.
For the cumulative six months of FY17 (1HFY17), the group's net profit shrank by 68.2% to RM9.27 million from RM29.18 million a year ago, after accounting for dividend income of RM11.2 million from its investment in Mercedes-Benz Malaysia.
EPS during the period under review deteriorated to 9.2 sen from 28.96 sen.
Revenue in 1HFY17 dropped 4% to RM708.16 million from RM737.88 million, as its Mercedes-Benz trading operations recorded a loss of RM1.9 million versus a profit of RM18 million in 1HFY16.
Cycle & Carriage explained that the increased competitive intensity resulted in lower unit sales, reduced margins and, to a lesser extent, higher operating expenses.
Unit sales in 1HFY17, the group noted, were 13% lower with the model mix moving away from S-Class to the lower margin GLC-Class and E-Class.
"Margins suffered further due to strong competition in the premium car market," said the group, adding that, however, its after-sales division continued to perform satisfactorily.
Cycle & Carriage also said as at end-June this year, it had a net debt of RM116.9 million, as compared to RM100.4 million at end-2016, mainly due to higher working capital requirements and a deposit paid for a land purchase for the development of a new showroom.
On outlook, the group expects trading conditions to remain challenging for the remainder of 2017, following "a difficult first half for the group during which consumer sentiment remained cautious and competition intensified".
Cycle & Carriage closed down 0.8% or 2 sen lower at RM2.38, for a market capitalisation of RM241.79 million.