KUALA LUMPUR (Nov 1): Cycle & Carriage Bintang Bhd (C&C) has sunk into its fourth straight quarter of losses, posting a net loss of RM12.24 million in its third quarter ended Sept 30, 2019 (3QFY19), against a net profit of RM3.51 million in the previous corresponding quarter, due to lower sales and weaker margins.

This has resulted in its recorded loss per share of 12.15 sen for 3QFY19 versus earnings per share of 3.48 sen for 3QFY18, according to its bourse filing.

Quarterly revenue contracted 39.4% year-on-year (y-o-y) to RM258.87 million from RM427.21 million.

For the cumulative nine months (9MFY19), the Mercedes-Benz distributor recorded a net loss of RM16.95 million against a net profit of RM17.82 million in the same period the previous year. Revenue shrank 28.8% to RM862.54 million from RM1.21 billion a year ago.

C&C blamed the net loss on its Mercedes-Benz operations, which recorded a net loss of RM28.2 million for 9MFY19 compared to a net profit of RM6.6 million in the prior year. It attributed this to lower unit sales which declined by 33% and reduced margins due to a shift in sales mix to lower-priced models and weak consumer demand.  

On prospects, it said the outlook for the rest of the year remains very challenging, with sluggish consumer demand and continued pressure on margins.

Following a business review amidst the current subdued economic outlook and consumer sentiment in Malaysia, the group said it will not proceed with the planned construction of a Sales, Service, Spare parts facility (3-S Centre) on the plot of Sungai Besi land purchased previously.

It added that this decision was arrived at after having considered the changes in market dynamics arising from new decisions and delays relating to the integrated transit-oriented development Bandar Malaysia project. Management is exploring the various options available in relation to this plot of land so as to determine the best course of action from a financial return perspective.

Shares in C&C closed one sen or 0.75% higher at RM1.35 to give the auto dealer a market value of RM136 million. The counter has eased some 28.2% from RM1.88 a year ago.