DRB-Hicom 1Q net profit drops 15.2% amid higher tax charges

TheEdge Thu, May 23, 2024 08:54pm - 4 weeks View Original

KUALA LUMPUR (May 23): DRB-Hicom Bhd’s (KL:DRBHCOM) net profit for the first quarter ended March 31, 2024 (1QFY2024) dropped 15.2% to RM91.54 million from RM107.91 million in 1QFY2023, despite higher revenue, no thanks to higher taxation charges.  

Quarterly revenue rose 5.59% to RM4.33 billion from RM4.1 billion on the back of improved performance across the group’s businesses, led by its banking and property segments. Taxation charges, however, jumped 46.7% to RM61.91 million from RM42.2 million, which the group attributed to certain expenses that were not tax-deductible.

At the pre-tax level, DRB-Hicom’s profit before tax rose 5% to RM210.76 million from RM200.77 million, its bourse filing showed.

DRB-Hicom’s banking segment registered a 34.6% increase in revenue to RM510.41 million from RM379.29 million on higher financing income, driven by a rise in financing volume.

As for the group’s properties segment, it posted a 63% jump in revenue to RM79.09 million from RM48.51 million previously on higher revenue from property development projects which offset lower revenue from construction projects.

Due to higher sales volume, DRB-Hicom’s key automotive segment logged a marginal 0.8% rise in revenue to RM3.05 billion from RM3.02 billion previously.

Despite, the economic challenges on the horizon, including escalating geopolitical conflict, unpredictable global commodity fluctuations and heightened financial market volatility, DRB-Hicom maintained a “satisfactory” outlook for the financial year ending Dec 31, 2024 (FY2024).

On its automotive segment, the group said Proton, via deepening its collaboration with Zhejiang Geely Holding Ltd, continues to build up its competencies in the Asean region, while Honda Malaysia targets a higher sales target of 95,000 units for 2024 versus the 80,027 units achieved in 2023, despite the Malaysian Automotive Association’s forecast for lower y-o-y total industry volume (TIV) in 2024.

It said its banking business, under Bank Muamalat Malaysia Bhd, continues to progress on its digital transformation journey, further bolstering capabilities with the aim to enhance customer experience.

As for its postal business, under 53.5%-owned Pos Malaysia, the group said it remains steadfast in executing its ongoing transformation strategies to further improve margin-led businesses while aligning with environmental, social and governance aspirations.

“Other sectors under the group, namely aerospace and defence, services and properties, continue to maintain a proactive approach to cost management in ensuring resilience against prevailing market risks,” the group added.  

Shares in DRB-Hicom ended two sen or 1.43% higher at RM1.42, giving the group a market capitalisation of RM2.75 billion.

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