Friday 29 Mar 2024
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KUALA LUMPUR (Nov 22): MBM Resources Bhd posted a 66% drop in net profit to RM7.33 million or 1.88 sen per share for the third quarter ended Sept 30, 2017 (3QFY17), from RM21.30 million or 5.45 sen per share a year earlier.

Quarterly revenue, however, grew 8% to RM466.81 million from RM431.94 million, according to its filing with Bursa Malaysia.

The group attributed the lower earnings to the recognition of impairment on a goodwill of RM10.8 million coupled with a lower contribution from associates.

MBM share of associates' results contracted by 18.2% or RM5.3 million to RM23.8 million. However, share of results in its joint venture improved by 90.3% or RM1.2 million due to recovery in demand from a major original equipment manufacturing (OEM) customer.

In the motor trading segment, revenue increased 7.2% to RM410.4 million on higher sales volume for most of the brands within the group, helped by revised sales and marketing strategies and ongoing cost structure review.

Meanwhile, its auto parts manufacturing segment saw an 8.8% growth in revenue to RM53.2 million mainly due to a gradual recovery of demand from the division's major OEM customers. Despite the improved revenue, it incurred higher losses of RM4.2 million.

For the cumulative nine-month period, MBM's net profit dropped 27% to RM42.91 million or 10.98 sen per share, from RM58.50 million or 14.97 sen per share in the previous corresponding period.

Cumulative revenue was 5% higher at RM1.29 billion compared to RM1.23 billion previously.

Moving forward, the group anticipates little change in the market environment.

For the motor trading division, strong discounting pressures from competition, strict hire-purchase approvals, and uncertainties in the industry environment, among others, will remain as the major factors affecting the division's performance.

"The group will continue to monitor the performance of its auto parts manufacturing division, including the viability of the loss-making operations," it said.

The group distributes a number of automotive brands such as Perodua, Volkswagen and Volvo, as well as manufactures automotive parts.

Shares in MBM closed down one sen or 0.47% to RM2.12, giving a market capitalisation of RM828.68 million.

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