KUALA LUMPUR (Aug 23): MBM Resources Bhd's net profit for the second quarter ended June 30, 2017 (2QFY17) fell 14.13% to RM16.15 million, from RM18.81 million a year earlier, amid a decline in the revenue of both its motor trading and auto parts manufacturing segments.

Earnings per share dropped to 4.13 sen from 4.82 sen, the group said in a filing to Bursa Malaysia.

MBM also recorded a lower share of results in its joint venture, which fell 49.6% to RM1.3 million on lower demand from its original equipment manufacturing (OEM) customer, while its share of associates' results contracted by 10.2% to RM23.2 million on lower production volume in the quarter.

The group, which distributes a number of automotive brands such as Perodua, Volkswagen, and Volvo, as well as manufactures automotive parts, recorded revenue of RM403.91 million, down 5.43% from RM427.1 million in 2QFY16.

In the motor trading sector, revenue fell 5.2% to RM351.1 million on lower vehicle sales, leading to a 6.6% decline in pre-tax profit to RM4.3 million in the quarter.

"Strong competition from other comparable brands also contributed significantly to the lower sales volume (although) the decline is partially mitigated by favourable model mix with continuous interest in the Volvo XC90 as well as volume sales in the lower-priced segment," MBM said.

Meanwhile, its auto parts manufacturing segment saw a 7.1% fall in revenue to RM52.5 million on lower overall demand for its tyre assembly, steel wheels, and acoustics products. Marginally higher losses of RM900,000 were recorded for the segment, attributable also to losses incurred at the division's alloy wheel plant.

The group's net profit for the first half of FY17 (1HFY17) fell to RM35.58 million from RM37.21 million a year ago.

MBM's 1HFY17 revenue, however, was higher at RM821.98 million compared to the RM801.04 million it registered in the same period last year.

Going forward, the group said it expects the market environment to remain challenging due to intense competition, uncertainties in the industry, and strict hire-purchase approvals.

"We will continue to improve the production efficiency at its manufacturing plants and to secure higher volume to achieve more sustainable margin. Cost structure review and new model launches by Perodua and Volvo in the coming quarters are expected to contribute positively to our performance," it said.

MBM's share price closed down 1 sen at RM2.18, giving a market capitalisation of RM852.14 million.