KUALA LUMPUR: GPA Holdings Bhd, which shut the manufacturing operations of three loss-making subsidiaries almost two years ago to focus on expanding the distribution of automotive batteries, believes it can turnaround “in the near term”.

GPA Holdings executive director David Lai Sze Pheng said the company has also been launching new products and selling imported maintenance-free batteries under its own brand.

“We wish to turn around as soon as possible, as I have said within the company, we can control the internal issues and resources but again, external factors such as the currency (ringgit) and lead metal prices are affecting us,” Lai told reporters after the company’s annual general meeting yesterday.

Recently, GPA has launched two new products — motorcycle batteries and motor vehicle lubricant. “We started the distribution of the motorbike batteries in August. As for the lubricant, we started [selling it] in July by exporting to Southeast Asian countries.

“[Our plans for the products] are still at an infancy stage, as we test the markets’ [response]. If the prices and demand are good, we will roll out more [of the products] in future,” said Lai.

GPA is also working to improve its distribution channels by shifting its products to dealers, rather than just relying on distributors. “We can actually reduce our dependency on big distributors and concentrate more on dealers, who can give us a better margin. Hopefully, that will help enhance our bottom line and revenue going forward."

However, Lai said the company’s business prospects remain challenging, given the ringgit’s and lead prices’ volatility. He added that lead prices have fluctuated in the past one-and-a-half years; the metal was traded at US$1,700 per tonne, before rising to as high as US$2,400 per tonne. It is now trading at about US$2,500 (RM10,525) per tonne.

“So, this is the main variable which we are very concerned about, as batteries comprise predominantly of lead,” he said, adding that the prices of raw materials needed for battery production are denominated in US dollar.

GPA was loss-making from the financial year ended March 31, 2012 (FY12) to FY16. Though the company returned to profit in FY17 with a net profit of RM8 million against a net loss of RM2.9 million in FY16, it was mainly due to a one-off gain from the sale of investment property of RM11.9 million. Revenue, however, shrank 33% year-on-year (y-o-y) to RM93.2 million from RM138.4 million.

The company started FY18 in the red again, with the first quarter ended June 30, 2017 recording a net loss of RM940,000 compared to a net profit of RM1.4 million a year ago. The weaker performance was due to lower margins, no thanks to higher costs because of a weaker ringgit and higher lead prices. Quarterly revenue fell 30% y-o-y to RM18.5 million from RM26.6 million.

GPA shares closed unchanged at 10 sen yesterday, with a market capitalisation of RM98.05 million. Year to date, the stock has climbed some 11%.