APM Automotive 1Q net profit slips 29.8% on higher costs

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KUALA LUMPUR (May 14): APM Automotive Holdings Bhd's net profit dropped 29.8% to RM17.83 million or 9.11 sen a share in the first quarter ended March 31, 2015 (1QFY15) from RM25.41 million or 12.98 sen a share a year ago due to higher operating costs and higher imported raw material cost from a stronger US dollar.

Revenue, however, rose 3.3% to RM318.26 million from RM308.12 million in 1QFY14, thanks to higher sales for operations outside Malaysia.

In a filing with Bursa Malaysia today, the automotive component maker said its operations outside Malaysia continues to register impressive revenue growth with increase of 91% for 1QFY15 at RM23.3 million compared with RM12.2 million a year ago.

"The revenue from the coach’s seat business in Australia of RM10.3 million remains the main contributor to the increase in revenue. In tandem with the higher revenue, the segmental profit was higher by 87.4% compared with RM900,000 in the same quarter of 2014," said APM (valuation: 2.4; fundamental: 2.5).

On prospects, APM sees the strong US Dollar and a weaker ringgit will pushing costs of imported raw materials up.

On its part, the group will continue to focus on operational efficiency, strengthening our automotive research and development capabilities and maintaining its commitment to expand beyond the domestic market. 

APM shares closed 10 sen or 1.9% lower at RM5.15 today, with a market capitalisation of RM1.03 billion.

(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.)