KUALA LUMPUR (Nov 27): DRB-Hicom Bhd reported a 95.8% drop in net profit to RM3.9 million or 0.2 sen per share in the second financial quarter ended Sept 30, 2015 (2QFY16) from RM93.09 million or 4.81 sen per share a year ago, mainly due to the current market sentiments and challenging economic and business conditions which had affected the group’s various businesses, especially the automotive and property sectors.

Revenue for the quarter came in 0.93% higher at RM3.25 billion from RM3.22 billion in 2QFY15.

In a filing with Bursa Malaysia yesterday, DRB-Hicom said all the business sectors contributed to the improved revenue except for the property sector due to the lower percentage of completion of the property development projects.

For the cumulative six months period (1HFY16), the diversified group slipped into the red with a net loss of RM15.82 million or 0.82 sen loss per share compared with a net profit of RM200.93 million or 10.39 sen per share in 1HFY15, due to the same reason.

Revenue for 1HFY16 fell 10.7% to RM6.2 billion from RM6.95 billion in 1HFY15.

DRB-Hicom said the decline in auto revenue is mainly attributable to the lower sales of motor vehicles during the period under review.

In a statement yesterday, DRB-Hicom said the outlook for the remaining period of FY16 continues to be challenging.

"Nevertheless, the group will continue to focus on cost management and initiatives to improve operational efficiency and effectiveness to improve the group’s resilience," it said.

DRB-Hicom said it is also intensifying efforts to improve the performance of the automotive segments through more aggressive sales and marketing campaigns as well as through the introduction of new products and services.

In addition, the group is also focusing on strengthening its logistics, as well as concession businesses as part of its strategy to enhance the contribution from its services sector. The acquisitions of Gading Sari Sdn Bhd, the Northern Gateway Infrastructure Sdn Bhd as well as the Media City Ventures Sdn Bhd are part of this strategy, it said.

Shares in DRB-Hicom fell one sen or 0.79% to close at RM1.26 yesterday, bringing a market capitalisation of RM2.44 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.)