KUALA LUMPUR (April 19): Defying a soft automotive market brought on by weak consumer sentiment, Cycle & Carriage Bintang Bhd saw its net profit rose 43.1% to RM9.5 million in its first quarter ended March 31, 2016 (1QFY16) from RM6.64 million a year ago, as its revenue improved on higher sales of lower-priced vehicles.

Revenue for the quarter under review came in 19.8% higher year-on-year (y-o-y) to RM315.14 million from RM263.12 million.

In a statement accompanying its results, Cycle & Carriage chairman Haslam Preeston said demand remained healthy in the first quarter with unit sales up 50%, despite a softer market that reflected a weaker economic environment.

"The level of sales growth was enhanced by slower first quarter sales in 2015 in anticipation of tax changes arising on the introduction of goods and services tax (GST)," he said.

He said although the group recorded a 20% increase in unit sales in 1QFY16, revenue on a per unit basis was reduced as the sales mix was weighted towards lower-priced vehicles.

Despite this, he said net profit from Mercedes-Benz operations rose 43% to RM9.5 million.

"Mercedes-Benz unit sales were 50% higher, despite supply constraints for some popular models," he said, adding that the group's after-sales division also performed satisfactorily.

Preeston also shared that Cycle & Carriage's facility upgrades at Petaling Jaya and Georgetown were completed in 1QFY16, while the showroom at Jalan Tun Razak in Kuala Lumpur has been re-located to improved premises in the same area.

He said the group's expansion plans continue with the construction of the new Autohaus in Cheras, Kuala Lumpur, targeted to be completed by the middle of the year.

On prospects, Preeston said while the business performed well in 1QFY16, he cautioned that the group is facing weaker economic sentiment, while the current Mercedes Benz E-Class is reaching the end of its life cycle.

According to data from the Malaysian Automotive Association (MAA), the automotive industry has been impacted by weak consumer sentiment, as car sales have dropped y-o-y in the first three months of 2016.

Last month, vehicle sales volume in Malaysia fell 28% to 48,800 units in March 2016 from 67,387 units in March 2015, due to a higher base effect following the buying rush ahead of the implementation of the GST in April 2015.

This follows a 25% y-o-y drop in total industry volume (TIV) to 37,900 units in February 2016, after a 12% y-o-y fall in TIV in January.

Cycle & Carriage shares closed one sen or 0.28% higher at RM3.59 today, with a market capitalisation of RM363.69 million.