MBM Resources posts net loss in 3Q as lockdown measures impact vehicle sales

TheEdge Wed, Nov 24, 2021 11:53pm - 2 years View Original


KUALA LUMPUR (Nov 24): MBM Resources Bhd reported a net loss of RM5.25 million for its third quarter ended Sept 30, 2021 (3QFY21), compared with a net profit of RM64.98 million in the same quarter last year, amid full lockdown measures implemented during the reporting quarter that affected its operations.

This marked the second time the company incurred losses in the last two years, with the first being a net loss of RM5.19 million it recorded for the March-June quarter under 2QFY20, just a month after Malaysia's first pandemic containment measure went into full swing.

The automotive player's quarterly revenue shrank 61.6% to RM230.56 million in 3QFY21, from RM600.45 million a year prior, its bourse filing showed. It posted a quarterly loss per share of 1.34 sen, compared with earnings per share of 16.63 sen previously. No dividend was declared.

The group attributed the lacklustre financial performance to the closure of its vehicle showrooms and manufacturing plants between June and mid-August, which caused a 63.2% revenue drop at its motor trading segment to RM201.6 million from RM547.43 million, while its auto parts manufacturing segment saw a 45.8% revenue fall to RM28.5 million from RM52.58 million.

Its share of results in its joint venture also only returned a meagre RM321,000 profit before tax for the quarter, against RM4.45 million previously, while it recorded a loss before tax of RM6.2 million from its associates, from a profit of RM55.4 million previously.

For its cumulative nine months ended Sept 30, 2021 (9MFY21), the group booked a net profit of RM58.41 million, down 32.88% from RM87.02 million for 9MFY20, while revenue retreated 21.36% to RM969.74 million from RM1.23 billion.

According to MBM Resources, it sold 72.9% less vehicles in 3QFY21 compared with in 3QFY20, while vehicle sales for 9MFY21 dropped 36.7% from 9MFY20's.

The group said the dip in its financial performance for 3QFY21 was due to intermittent and prolonged Enhanced Movement Control Order lockdowns caused most industries including the automotive industry to remain shut from June until mid-August 2021, affecting its 3QFY21. This was coupled with supply chain disruptions immediately after the reopening of most industries in mid-August 2021.

"[The] outlook for 4QFY21 seems to be better. For the group, more than 99% of our employees have been fully vaccinated. While challenges from the Covid-19 pandemic will continue, coupled with the slight disruptions to the supply chain, we are cautiously optimistic. This will be further boosted by the group's strong order book and supported by the year-end promotion campaign from the principals. The recent 2022 National Budget announcement has also given a positive hope to the automotive industry with the further extension of the SST exemption and the various incentives for the introduction of electric vehicles in Malaysia," the group said on its prospects for the rest of FY21.

MBM Resources shares settled unchanged at RM3.22 on Wednesday, giving the group a market capitalisation of RM1.26 billion.

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