KUALA LUMPUR (Dec 10): Berjaya Auto Bhd (BAuto) saw its net profit fall 7.75% year-on-year (y-o-y) to RM53.06 million in the second quarter ended Oct 31, 2015 (2QFY16) from RM57.52 million, on lower gross profit margin from local operations caused by unfavourable sales mix and intense competition.

The ringgit's weakening against the Japanese yen also ate into its earnings, as it had led to higher vehicle costs.

Its latest quarterly revenue was, however, 6.6% higher y-o-y at RM542.41 million from RM508.82 million, its filing with Bursa Malaysia showed.

The group has also proposed a second interim dividend of 2.5 sen per share for the financial year ending Apr 30, 2016 (FY16), payable Jan 15, 2016.

This brings its total dividend declared for the financial period ended Oct 31, 2015 (1HFY16) to 4.75 sen, compared to 1HFY15's 5.25 sen.

In a statement, BAuto said the increase in revenue was mainly driven by its competitively priced Mazda2 SKYACTIV and Mazda3 CKD SKYACTIV models here, while the Mazda2 SKYACTIV model was the main contributor in the Philippines.

Meanwhile, for 1HFY16, BAuto's net profit declined 7.35% to RM105.27 million from RM113.62 million, even though revenue was 2.94% higher at RM1.05 billion versus RM1.02 billion previously.

"The slight increase in revenue was primarily due to higher revenue contribution from the Philippines operations, partially offset by decline in revenue contribution from local operations as a result of unfavourable sales mix and sales revenue being recorded, net of GST (goods and services tax)," explained the company.

BAuto said the automotive industry in Malaysia continues to be weak amid ongoing local and global economic uncertainties.

"Consumer demand for passenger cars remains soft despite certain local distributors announcing that they will increase vehicle prices effective January 2016, while offering huge discounts and special packages to clear inventory towards the calendar year end," it noted.

It said the ringgit against the Japanese yen is currently at an unfavourable level, though it has shown signs of stability.

"This is likely to drive vehicle cost up for the remaining half of the financial year and may exert pressure on our gross profit margin," said BAuto.

Nevertheless, the company expects to maintain its sales volume growth momentum and perform satisfactorily for the remaining quarters of the current financial year.

BAuto shares closed 3 sen or 1.4% lower at RM2.12 today, for a market capitalisation of RM2.42 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.)