MBM earnings double on better sales from motor trading

PETALING JAYA: MBM Resources Bhd saw its earnings double in the first quarter ended March 31, as a result of improved sales from motor trading and auto-parts manufacturing divisions, as well as higher contributions from its associates and joint-venture (JV) company.

During the quarter in review, the car distributor registered a net profit of RM32.82mil compared with RM19.43mil in the corresponding period last year. Consequently, its earnings per share jumped to 8.4 sen from 4.97 previously.

For the current quarter, the group’s revenue rose 10.9% to RM463.46mil from RM418.07mil in the previous corresponding quarter. Its pre-tax profit increased 73.5% to RM39.25mil due to improved sales from both divisions, as well as higher profits from the associates and JV company.

MBM said despite the good results in the quarter in review, prospects would remain challenging in the coming quarters due to a confluence of factors.

“Although the group’s vehicle sales volume has shown improvement in the current quar- ter, we anticipate continuous challenges in the coming quarters.

“This is given the subdued demand for vehicles, intense competition in the market, stringent hire-purchase loan approvals and volatile foreign currency fluctuations, among others,” MBM said in a filing with Bursa Malaysia.

“However, the reduction in the prevailing rate of the goods and services tax from 6% to 0% should have a positive effect on car sales until the sales and service tax is reintroduced,” it added.