KUALA LUMPUR (May 23): MBM Resources Bhd's (MBMR) net profit jumped 68.9% to RM32.82 million in the first quarter ended March 31, 2018 (1QFY18) from RM19.43 million a year ago, due to improved sales from both motor trading and automotive parts manufacturing divisions, as well as higher profits from the associates and joint venture (JV) entity.
As a result, earnings per share came in higher at 8.4 sen compared with 4.97 sen a year ago.
Quarterly revenue also grew 10.9% to RM463.46 million from RM418.07 million.
In a filing with Bursa Malaysia today, MBMR said the improved quarterly performance in the motor trading segment is principally driven by higher sales volume from most of the brands within the group, especially the Perodua models which registered impressive sales volume during the current quarter under review aided by strong demand for the new Myvi.
"Likewise, the VW Tiguan also generated favourable customer interest during the quarter," it added.
MBMR said the group's share of associates' results also increased by 40.9% year-on-year (y-o-y) to RM36.8 million in 1QFY18.
The group's share of results in its JV improved by 41.5% y-o-y to RM3.4 million due to higher demand for its products and foreign currency gains.
Although the group's vehicle sales volume have shown improvements in 1QFY18, MBMR said it anticipates continuous challenges in the coming quarters given the subdued demand for vehicles, intense competition in the market, stringent hire purchase loan approvals and volatile foreign currency fluctuations, among others.
"However, the reduction in the prevailing rate of the goods and service tax from 6% to zero per cent should have a positive effects on car sales until the sales and service tax is reintroduced.
"Management's efforts to further refine the group's marketing strategies and production efficiencies are ongoing, likewise for the cost reduction initiatives. Management continues to take all measures to address the problems faced by the alloy wheel operations. These efforts are expected to strengthen the group's financial position moving forward," it added.
MBMR shares closed down one sen or 0.42% at RM2.35 today, bringing it a market capitalisation of RM918.59 million.