BAuto registers 46% rise in pre-tax profit

PETALING JAYA: Bermaz Auto Bhd’s (BAuto) pre-tax profit for the third quarter ended Jan 31 rose 46.9% to RM57.2 million from RM39 million a year ago, mainly from increased sales volume from the new CX-5 model and higher share of profit contribution from its associate company, Mazda Malaysia Sdn Bhd.
Mazda Malaysia’s performance was mainly due to the increase in production volume for the new CX-5 model to cater for the surge in demand for both the domestic and foreign markets.
Correspondingly, revenue for the quarter rose 65.2% to RM559.4 million from RM338.7 million a year ago.
The board has recommended a third interim dividend of 2.30 sen single-tier dividend per share in respect of the financial period ended Jan 31, payable on April 26. The total dividend declared for the financial period amounted to 5.40 sen single-tier dividend per share.
For the nine months ended Jan 31, pre-tax profit fell 14.2% to RM123.6 million from RM143.9 million a year ago, due to compressed gross profit margin, especially in the first quarter in the domestic market and share of loss from Mazda Malaysia in the first half of the financial year.
“The contraction in profit margin during the first quarter was partly caused by the old CX-5 run-out programme as higher sales incentives were given for this model to clear the old stock prior to the launch of the new model in October 2017,” said BAuto.
The share of loss from Mazda Malaysia was due to low production volume prior to the launch of the new CX-5 model. However, this was offset by the strong performance in the third quarter.
BAuto expects market trading condition to be challenging for the remaining quarter of the financial year ending April 30, in line with the marginal growth of only 2.3% in total industry volume projected by Malaysian Automotive Association for calendar year 2018.
“The recent interest rate hike in January 2018 and cautious consumer sentiment as a result of uncertainties in the local and global economy will also have an impact on demand for passenger cars,” it said.
BAuto said the new CX-5 model has generated favourable interest and demand in Malaysia. The increase in demand and the commencement of export of the new model to Thailand, Indonesia, the Philippines and Cambodia is expected to drive Mazda Malaysia’s profitability.
Meanwhile, the favourable movement of the ringgit against the Japanese yen in recent months is expected to reduce cost and will likely improve the group’s profitability.
Despite the implementation of the new excise duty brought by the Tax Reform for Acceleration and Inclusion Law effective Jan 1, which may hamper industry growth in the Philippines, Bermaz Auto Philippines Inc is still positive for the year on the back of new model introductions.
The company aims to increase its revenue and profitability by introducing a new range of Mazda models and expects to grow its dealership from 19 last year to 21 this year.