KUALA LUMPUR (Nov 19): MBM Resources Bhd saw its net profit in the third quarter ended Sept 30, 2020 (3QFY20) rise 16.52% to RM64.98 million from RM55.76 million a year ago as vehicle sales and manufacturing volume grew, thanks to sales tax exemption for new car purchases from June 15 to Dec 31 aimed at reviving flagging demand caused by the pandemic.

It also attributed the stellar earnings growth partly to the higher contributions from a joint venture entity, as well as a bigger share of associates' profit.

Its joint venture's profit jumped 93.1% to RM4.44 million in 3QFY20 from RM2.3 million a year ago, while share of associates' profit increased 2.9% to RM55.4 million from RM53.83 million.

Earnings per share increased to 16.63 sen per share in 3QFY20 from 14.27 sen in 3QFY19, the automaker's filing with Bursa Malaysia showed.

Quarterly revenue was up 16.52% to RM600 million from RM515.32 million a year ago.

For its cumulative nine months ended Sept 30, 2020 (9MFY20), however, net profit more than halved to RM87.02 million from RM179.46 million for 9MFY19 while revenue also declined 22.57% to RM1.23 billion from RM1.59 billion a year earlier.

On its prospects, the group is cautiously optimistic about 4QFY20 as it believes the tax exemption and incentives by the government on passenger vehicles will sustain the volume until the end of the year.

"Further, we are seeing good results from the measures introduced earlier to mitigate negative impacts from the various Movement Control Orders including various cost reduction measures and Transformation Programme aimed at improving overall performance, and we expect these measures to continue to drive up our performance moving forward," it added.

Nonetheless, it expects Covid-19 to remain as the key risk that could undermine the group's performance in the near future given the surging cases globally and locally.

Furthermore, this is compounded by foreign and local political uncertainties which will put further strain on the economic prospects moving forward, it added.

Noting that, the group said it continues to focus on delivering good customer experience at all its touch points and engaging with relevant stakeholders for sales, aftersales and manufacturing activities.

The counter closed up five sen or 1.58% to RM3.21, bringing it a market capitalisation of RM1.26 billion. Some 336,000 shares were traded.

However, year-to-date it has declined 21.5% from RM3.9 on Jan 2, 2020.