KUALA LUMPUR (Nov 2): Mercedes Benz dealer Cycle and Carriage Bintang Bhd returned to the black for the third quarter ended Sept 30 (3QFY20) with a net profit of RM7.2 million, from a net loss of RM12.24 million a year ago, as its car sales was lifted by the sales tax exemption under the PENJANA economic package, and cost-saving initiatives.

In a bourse filing, the car dealer said its revenue for 3QFY20 jumped 58.01% to RM409.05 million, from RM258.87 million.

With the stronger 3QFY20, the group narrowed its net loss for the nine months ended Sept 30 to RM11.89 million, from RM16.95 million a year ago. Cumulative revenue for the period, however, fell 11.39% to RM764.3 million from RM862.54 million.

"The group saw lower volume and margins due to a shift in the sales mix to lower priced models and weak consumer demand. This was exacerbated by the implementation of a Movement Control Order and other Covid-19 related restrictions, resulting in a further reduction in unit sales and after-sales volumes by 9% and 13% respectively, compared with 2019.

"Passenger car sales performance saw some improvement in the third quarter, however, with the announcement of a sales tax reduction by the government. The group also improved its performance by implementing cost savings initiatives which led to a lower net loss for the period," it said.

On prospects, the group said the automotive market is expected to remain challenging for the rest of the year. Nevertheless, it remains committed to its business improvement strategy,” it said.

Cycle and Carriage Bintang shares closed four sen or 2.78% higher at RM1.48 apiece, valuing the company at RM149.1 million.