Cycle & Carriage's 3Q net profit quadruples on higher Mercedes-Benz sales

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KUALA LUMPUR (Oct 29): Higher sales of Mercedes Benz vehicles resulted in Cycle & Carriage Bintang Bhd's net profit surging over fourfold to RM13.46 million or 13.36 sen per share in the third quarter ended Sept 30, 2015 (3QFY15).

It posted a net profit of RM3.34 million or 3.31 sen per share in the previous corresponding quarter, its filing with Bursa Malaysia today showed.

Consequently, its cumulative nine-month period's (9MFY15) net profit rose almost six times to RM41.93 million or 41.62 sen per share, from RM7.07 million or 7.02 sen per share in 9MFY14.

Its 9MFY15 revenue was up 86.12% to RM1.192 billion, from RM640.45 million in 9MFY14.

Cycle & Carriage said the group's good 9MFY15 results reflected good trading performance and the recognition of divided income (RM11.2 million) received from Mercedes-Benz Malaysia, the group's joint venture with Daimler AG.

"No dividend income was recognised in 2014", it noted.

Its chairman Alex Newbigging said 9MFY15's revenue rise was backed by a 64% increase in unit sales, and a favourable sales mix weighted towards higher-priced vehicles, particularly the hybrid models.

A net profit of RM30.7 million was recognised by the Mercedes-Benz operations, compared with RM7.1 million in the previous year, due to the increased revenue with improved margins, especially from hybrid models.

Newbigging said the company expects trading conditions to become more difficult and competition to increase in the remainder of the year, in the face of a weakening economy.

In spite of this, Newbigging said the upgrading of the company’s facilities in Petaling Jaya, Penang and Kuala Lumpur, which began in the third quarter of this year, will continue into next year, including the company’s remaining locations.

"In addition, the construction of the new Autohaus in Cheras, Kuala Lumpur, is expected to be completed by early next year," he added.

Cycle & Carriage's (fundamental: 2.1; valuation: 1.1) shares closed 6 sen or 1.8% higher at RM3.39 today, with a market capitalisation of RM341.52 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)