DRB-Hicom cuts net loss by 27% to RM101mil

KUALA LUMPUR: DRB-Hicom Bhd cut its net loss by 27% year-onyear to RM101.35mil for its first financial quarter (Q1) ended June 30, thanks to lower losses by subsidiary Proton Holdings Bhd and a higher profit contribution from Pos Malaysia Bhd.

However, loss attributable to DRB-Hicom’s owners was little changed – from RM169.3mil a year earlier to RM169.71mil in the quarter under review.

Based on the conglomerate’s latest financial report to Bursa Malaysia, this was due to higher payout to holders of the group’s redeemable convertible cumulative preference shares (RCCPS) and non-controlling interest.

Recall that the Government has subscribed to 1.5 billion Proton RCCPS at an issue price of RM1 each since June last year as a way of giving RM1.5bil soft loan to the carmaker.

On June 22, Minister of Finance Inc’s 99.9%-owned subsidiary Govco Holdings Bhd completed the subscription of the final 250 million RCCPS.

DRB-Hicom, whose core businesses are in the automotive, services and education, and property sectors, saw its revenue increase by a third to RM3.34bil, of which 63.5% was contributed by the automotive sector.

The automotive revenue rose by 19% to RM2.12bil, boosted by better sales during the Hari Raya Aidilfitri festive period.

The services sector recorded a 72% jump in revenue to RM1.12bil. The improved performance was mainly derived from the courier and logistics businesses of Pos Malaysia and higher sales achieved by the group’s banking subsidiary, Bank Muamalat Malaysia Bhd.

Finally, revenue from the group’s property, asset and construction sector lifted 33% to RM97.07mil. The increase was mainly attributed to revenue recognised from construction-related projects.

On its prospects, DRB-Hicom said

the recent deal with Chinese automaker Zhejiang Geely Holding Group Ltd (ZGH) would put Proton in a stronger position, as the Chinese group would bring along its technology and expertise to Malaysia’s first carmaker in an effort to re-claim the mantle in the domestic car market.

“Reviews by both analysts as well as journalists about the deal and ZGH themselves have been positive, and DRB-Hicom remains confident that the turnaround of Proton will be achieved in due course,” it said.

No interim dividend has been declared for the quarter ended June 30.