This article first appeared in The Edge Financial Daily, on May 19, 2016.

KUALA LUMPUR: Automotive group MBM Resources Bhd saw its net profit for the first financial quarter ended March 31, 2016 (1QFY16) fall 47.6% to RM18.4 million or 4.71 sen a share, from RM35.14 million or 8.99 sen a share a year ago, mainly due to the recognition of a one-off property contribution in 1QFY15, and lower vehicle sales and production volumes in 1QFY16.

Revenue for 1QFY16 also came in 36.8% lower at RM373.94 million, from RM591.74 million in 1QFY15, mainly due to lower revenues from both its motor trading and auto parts manufacturing divisions.

In a filing with Bursa Malaysia yesterday, MBM said its motor trading division’s revenue fell 18.2% year-on-year (y-o-y), after a higher sales performance in 1QFY15 in anticipation of the implementation of the goods and services tax in April last year.

Its auto parts manufacturing division’s revenue declined 7.7% y-o-y due to lower demand by major customers.

On its prospects, MBM said the trading environment remains challenging as customer sentiment stays soft.

“Operating costs will continue to be affected by uncertain exchange rate movements. [However,] new and facelifted models to be introduced from within our marques in the second half are expected to benefit the group’s performance,” it said.

“MBM’s priorities moving forward are to focus on prudent spending to manage operating costs and maintain its market share,” it added.