KUALA LUMPUR (Feb 22): MBM Resources Bhd posted a 68% drop in net profit to RM3.52 million or 0.9 sen per share for the fourth quarter ended Dec 31, 2016 (4QFY16), from RM11.01 million or 2.82 sen per share in 4QFY15.

Revenue rose 2% to RM447.74 million from RM437.73 million, the group said in a filing with Bursa Malaysia today.

MBM attributed the lower performance to a one-off impairment of RM30.3 million, which was partly offset by better share of associates' performance.

The group said its motor trading division posted slightly lower revenue amid subdued demand for passenger cars. However, it said pre-tax profit for the segment improved by RM6 million.

Meanwhile, its auto parts manufacturing division saw a 32% increase in revenue but had widened losses due to its alloy wheel plant operating below the optimal level.

"We are pleased that the group remained resilient and continued to deliver operational growth despite the drop in TIV (total industry volume) for 4QFY16 against the corresponding quarter.

"Due to the challenging economic environment, we have also made assessment on our investments and assets, and recognised some impairments on prudent ground," said MBM executive chairman Datuk Abd Rahim Halim.

For the full financial year ended Dec 31 (FY16), net profit fell 26% to RM62.03 million from RM84 million in FY15, while revenue declined 7% to RM1.68 billion from RM1.82 billion.

The group expects market conditions to remain challenging going forward but said new model launches by the brands within the group are expected to contribute positively.

"Notwithstanding the challenging economic landscape ahead, the group will continue to streamline our operations through efforts in driving sales with new car models, providing improved aftersales service as well as cost management initiatives.

"We are optimistic for the growth of our motor trading division moving forward, fuelled by new and upcoming car models carried by automotive brands offered by the group. We believe that the auto parts manufacturing division will also be able to leverage on this aspect to deliver higher volume contribution as we kick off the new financial year," said Abd Rahim.

MBM's share price closed up 5 sen or 2.11% at RM2.42, giving it a market capitalisation of RM945.94 million.