Friday 29 Mar 2024
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KUALA LUMPUR (May 24): MBM Resources Bhd's net profit for the first quarter ended March 31, 2017 (1QFY17) rose 5.6% to RM19.43 million from RM18.4 million a year earlier, on higher revenue.

In a filing with Bursa Malaysia, MBM said revenue was 11.8% higher at RM418.07 million, compared with RM373.94 million a year ago, due to exceptional sales of premium vehicles.

For its motor trading business, revenue for the segment rose 10% year-on-year or RM33.7 million higher, thanks to model mix with exceptional sales of the Volvo XC90, supported by sales volume in the lower-priced segments and better aftersales revenue.

"As a result, PBT (profit before tax) improved by 51.9% or RM1.4 million to RM4.2 million compared to the corresponding quarter," MBM said.

As for the auto parts manufacturing business, revenue came in higher by 27.5% or RM10.3 million at RM47.9 million, driven by higher production and sales at both its tyre assembly and wheel manufacturing plants.

However, it noted that despite the higher production, the division incurred higher losses in 1QFY17 by RM1.8 million to close at a loss of RM6.3 million.

"The higher losses were primarily attributable to the losses incurred at our alloy wheel plant. However, various measures are currently being taken to mitigate the losses and have yet to take effect in the quarter under review," it said.

On outlook, MBM said new model launches by brands within the group in the coming quarters and concerted effort to improve aftersales revenue are expected to contribute positively to its performance.

It also said that various measures to improve the production efficiency at its manufacturing plants and secure higher volume to achieve more sustainable margins are being taken.

"All these measures are meant to strengthen the group's operational performance moving forward," it said.

Still, it noted that the market environment remained challenging in 1QFY17, especially in terms of purchase of big-ticket items such as new motor vehicles.

"Although domestic economy data has indicated some improvements, intense competition in the domestic market and strict hire-purchase approvals, among others, will continue to be the headwinds to the group's performance in the coming quarters," it said.

MBM closed 0.8% higher at RM2.42, valuing the group at RM945.94 million.

 

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