KUALA LUMPUR: DRB-Hicom Bhd, which wholly owns national car maker Proton Holdings Bhd, slipped to a net loss of RM19.72 million in the first quarter ended June 30, 2015 (1QFY16) from a RM107.84 million net profit a year earlier, dragged by lower sales of motor vehicles in the current quarter.

It incurred a loss per share of 1.02 sen in 1QFY16 compared with earnings per share of 5.58 sen in 1QFY15. Revenue for 1QFY16 fell 20.8% to RM2.95 billion.

DRB-Hicom’s automotive business had suffered a 22.12% drop in revenue in 1QFY16. Automotive contributed 76% to the group’s total revenue.

In a statement yesterday, DRB-Hicom said the automotive industry is currently experiencing challenging sales due to various factors, including more stringent loan approval policies coupled with weaker consumer sentiments and more intense competition.

The group warned that the current financial year ending March 31, 2016 (FY16) would be “very challenging”.

“DRB-Hicom as a group, with a diverse portfolio of products and services across various business sectors, has been affected by the current market sentiments and a challenging economic and business landscape,” it added.

To mitigate the impact of the market conditions, DRB-Hicom said it has initiated cost management measures and will continue to improve operational efficiency in all its businesses.

DRB-Hicom (fundamental: 0.3; valuation: 2.4) shares closed unchanged at RM1.32 yesterday. The counter has fallen 22.7% from RM1.70 since January.

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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in digitaledge Daily, on August 28, 2015.