KUALA LUMPUR (Sept 20): Auto parts producer Sapura Industrial Bhd posted a net loss of RM1.03 million for its second quarter ended July 31, 2017 (2QFY18), compared with a net profit of RM873,000 a year ago, due to lower revenue and higher operating costs.

Quarterly revenue dropped 11.69% to RM43.08 million from RM48.78 million, which Sapura Industrial said was in tandem with the country's declining trend in total industry production, as reported by the Malaysian Automotive Association (MAA).

Citing MAA data, Sapura Industrial said Malaysia's total vehicle production for the second quarter of 2017 dropped by 12% to 117,303 units, from 133,372 in the same period last year.

This, it added, was amid a "cautious stance" taken by original equipment manufacturers, as the market grappled with "soft" conditions.

As for the higher operating costs, Sapura Industrial blamed it on rising cost of imported materials, as well as labour and production-related expenses, as automotive firms geared up to launch their products in the third quarter of this year.

For the first six months of FY18, Sapura Industrial posted a net loss of RM894,000, compared with a net profit of RM993,000 in the February-July period of 2016, despite a 3.4% rise in revenue to RM97.98 million from RM94.76 million.

Going forward, Sapura Industrial said the outlook for the second half of the year will "continue to be challenging" for the automotive sector.

"As such, the group has intensified its efforts to further strengthen operational efficiency," it said in a filing with Bursa Malaysia today.

Established in 1994 and listed on the Main Market since 1997, Sapura Industrial shares were not traded today. The counter was last traded at 94 sen, giving a market capitalisation of RM68.41 million.