KUALA LUMPUR (March 16): Bermaz Auto Bhd (BAuto) saw its net profit slump 66.5% to RM27.15 million for the third quarter ended Jan 31, 2020 (3QFY20) largely due to lower profit contribution from domestic operations and lower share of profit contribution from its associate company, Mazda Malaysia Sdn Bhd (MMSB).

BAuto also contributed to the lower profit on thinner margin arising from the higher costs on the new facelift of the CX-5 model compelled by the current market sentiment. It had also incurred expenses from the employees’ share scheme amounting to RM800,000 in the quarter under review.             
As a result, its earnings per share in 3QFY20 fell to 2.34 sen, from 6.99 sen last year, according to its filing with Bursa Malaysia. 

Quarterly revenue also shrunk nearly 40% to RM467.46 million versus RM778.13 million a year ago. BAuto said the lower revenue is due to lower sales volume from domestic and the Philippine operations. 

The group has declared a lower third interim single-tier dividend of 1.45 sen per share, payable on May 28, compared with a dividend of 4.5 sen per share last year. This brings the total dividend distribution to 7.45 sen per share for 9MFY20, versus 10.75 sen a year ago. 

For its nine-month period ended Jan 31 (9MFY20), net profit contracted 52.2% to RM98.05 million from RM205.21 million, while revenue declined 25.3% to RM1.46 billion against RM1.95 billion a year earlier. 

On prospect, BAuto said performance of the group for the final quarter will be challenging. 

Total Industry Volume (TIV) in Malaysia is projected at 607,000 units in 2020, a marginal 0.4% higher than the TIV in 2019 at 604,287 units, after taking into consideration a moderation in consumer spending in light of prevailing economic uncertainties and tighter credit assessment from the financial institutions. 

“The Malaysian automotive sector is expected to remain challenging in 2020 in view of the stiff competition among the automotive players. Global headwinds, such as the trade war between the US and China, the outbreak of the Covid-19 virus, the fear of global recessions and the recent political turmoil have resulted in weaker consumer sentiment particularly on purchase of big-ticket discretionary items such as motor vehicles,” the group added. 

In the Philippines, BAuto said Bermaz Auto Philippines Inc seeks to preserve its revenue and profitability through further strengthening of its brand equity in tandem with sustainable dealer support and the launch of the new and facelift models. 

BAuto shares closed unchanged at RM1.48, bringing its market capitalisation to RM1.72 billion. The counter saw some 3.44 million shares exchanging hands.