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First of all, one cannot compare the profit for this quarter with last quarter because, last quarter's result was boosted by the property division that had recognised RM 175 million revenue that delivered RM 134 million profit or 76% margin !! One can see that this is an unrealistic profit level and is unlikely to be repeated.
In fact, we should be comforted that Proton's revival has confirmed that DRB has finally turned around.
Further good news is as follows:-
(a) there is a total of RM 1.4 billion of armoured vehicles (44 units) that has to be delivered by end of this year. Which means to say next 2 quarters will see at least a RM 700 m revenue per quarter compared with only RM 355 m this quarter; (htt(https://www.theedgemarkets.com/article/drbhicom-gains-traction) ) If POS is successful in getting an increase in tariff, from current RM 0.60/stamp to RM 1.00/stamp which is the lowest increase since 1957, and assuming that mail volume continues to drop by 10%, POS in 2019, its profit will increase by RM 30 million per quarter, which is enough to offset RM 15 million loss suffered in the latest quarter. Note that the last tariff adjustment was almost 10 years ago; POS delivered 655 million mails in 2018
(c) Composites Technology Research Malaysia Sdn Bhd (CTRM), has an order book of RM8.3 billion, which should be a good buffer; CTRM is involved in the aerospace and composite industries; (https(https://www.theedgemarkets.com/article/drbhicom-gains-traction) There is a book gain of RM 849 million from the sale of RM 1.9 billion land in Johor that is supposed to be completed this year.
(https://www.thestar.com.my/business/business-news/2018/03/09/drbhicom-...)
Lastly, the Automotive division contributes 65% of revenue and 74% margins to DRB and it is the division that is growing, so DRB is indeed on the right track.
