KUALA LUMPUR (June 25): DRB-Hicom Bhd's profitable run has ended after five quarters with the diversified group slipping into loss in the first quarter ended March 31, 2020 (1QFY20), as both its automotive segment and services segment did not fare well.
Quarterly revenue amounted to RM2.74 billion, which was also its lowest since the quarter ended June 30, 2018 when it posted a revenue of RM2.65 billion. Notably, revenue contributions from all three segments were impacted by the Movement Control Order (MCO).
DRB-Hicom booked a net loss of RM173.27 million or 8.96 sen loss per share for 1QFY20. There is no comparable quarter following a change in its financial year end to Dec 31.
Notably, the implementation of the MCO on March 18 onwards affected DRB-Hicom for two weeks in the quarter under review.
The automotive segment booked a pre-tax loss of RM44.12 million, as the business operations were temporarily ceased during the lockdown.
Meanwhile the services sector — comprising postal and logistics, and banking business — also posted a pre-tax loss of RM18.78 million despite ongoing operations during MCO under the "essential services" classification.
Compounding the impact was RM72 million foreign exchange losses on translation of payables and borrowings.
However, the group's property segment booked a pre-tax profit of RM18.78 million thanks to construction projects, although DRB-Hicom pointed to lower billings as construction sites were temporarily closed during the MCO.
FY20 to be adversely impacted by Covid-19
"For the second quarter of 2020, various forms of MCO were enforced and hence a similar impact [on revenue] is expected," said the company.
The group recommenced businesses in early May in line with the staggered reopening of the economy, with operations resuming under strict protocols.
On sales of Proton vehicles, DRB-Hicom said it will respond with consumer promotions and new model launches to recover lost ground — having sold 21,757 units in 1QFY20.
It cited uncertainties over the other business segments, due to the Covid-19 pandemic.
"Based on the aforementioned, the group's operational performance for FY20 will be adversely impacted by the ongoing pandemic crisis," it said.
"Notwithstanding the above, the group will continue to implement prudent cost optimisation measures and cash flow management to ensure the group is able to meet its financial and operational obligations," it added.
Shares in DRB-Hicom closed unchanged at RM1.75 apiece, valuing the group at RM3.38 billion.