Cycle & Carriage 2Q net profit soars 10-fold to RM21.83m

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KUALA LUMPUR (July 23): Cycle & Carriage Bintang Bhd, which saw its share price hit a three-and-a-half-year high today, posted a 10-fold jump in its net profit for the second quarter ended June 30, 2015 (2QFY15) to RM21.83 million or 21.67 sen a share, on improved performance from its retail and aftersales operations, and recognition of dividend income.

The group recorded a net profit of RM2.03 million or 2.02 sen a share in the same period last year, its filing to Bursa Malaysia showed.

Revenue for the quarter also doubled to RM472.36 million from RM231.16 million from last year. Better earnings aside, Cycle & Carriage did not declare a dividend for the period.

Meanwhile, for its cumulative six months (1HFY15), net profit jumped six-fold to RM28.47 million or 28.26 sen a share from RM3.73 million or 3.7 sen a share in the last corresponding period.

Cumulative revenue stood at RM735.48 million, up 76.14% from RM417.56 million in 1HFY14.

Cycle & Carriage chairman Alex Newbigging, in a statement, said the group performed considerably better in the first half of 2015 due to strong sales of popular models, improved margins, and recognition of the Mercedes-Benz Malaysia Sdn Bhd (MBM) dividend income.

According to him, Mercedes-Benz operations recorded a net profit of RM17.3 million, compared to RM3.7 million in the previous year, due to a 46% jump in unit sales and improved margins.

"Overall net profit, which included dividend income received from MBM in June 2015, was RM28.5 million," he added.

He said the group has recently commenced a programme of upgrades to existing facilities, while a new Autohaus in Cheras, Kuala Lumpur, is expected to be operational by around the year end.

Going forward, he said the outlook for the rest of the year is expected to be satisfactory, although there will be challenges due to tougher trading conditions and model life cycle issues.

Cycle & Carriage closed its three-and-a-half-year high today at RM3.46, for a market capitalisation of RM348.58 million.

(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.)