This article first appeared in The Edge Financial Daily on March 1, 2018

KUALA LUMPUR: DRB-Hicom Bhd reported a net loss of RM58.15 million for the third quarter ended Dec 31, 2017 (3QFY18) compared to a net profit of RM351.86 million a year ago, due to a slump in automotive sales and a one-off impairment at Proton.

Revenue slipped 11% year-on-year to RM3.05 billion from RM3.43 billion on the lower automotive sales and reduced contribution from a banking unit, the group said in a Bursa Malaysia filing.

Automotive segment’s revenue fell 23%, with December sales down near 16% y-o-y,  mirroring the industry’s soft climate. Product development costs and potential claims related to Proton also weighed on earnings. Of note, its results in the previous corresponding quarter had included a RM39.11 million gain from the sale of Corwin Holding Pte Ltd.

For the first nine months of FY18 (9MFY18), the group posted a net profit of RM508.71 million versus a net loss of RM127.07 million in 9MFY17, after recognising a research and development grant, while its operating companies performed better.

Accumulative revenue expanded 13% y-o-y to RM9.73 billion from RM8.58 billion, boosted by improved numbers from Pos Malaysia Bhd and DRB-Hicom’s property sector.

DRB-Hicom said it expects performance for FY18 to be better than  FY17’s.  Its share price closed at RM2.62 yesterday, down five sen, valuing it at RM5.07 billion. Year to date, the stock is up some 16%.