DRB-HICOM stamps first profit in 3 years

Turnover rises 6pc to RM12.79b on higher revenue from services, property segments

DRB-HICOM Bhd is profitable for the first time in three years, with a RM498.44 million net profit for the year ended March 31.

This reversed the RM456.64 million net loss recorded previously, it said in a statement.

Group turnover rose six per cent to RM12.79 billion, with revenue from both services and property sectors supporting lower sales in the automotive sector.

DRB-HICOM’s earnings per share stood at 25.78 sen, compared with -23.62 sen a year ago.

The board of directors recommended a first and final dividend of three sen per share.

DRB-HICOM said revenue in its automotive sector slipped 7.5 per cent year-on-year to RM7.47 billion in the 12 months under review. On a quarterly basis, automotive sales continued to dip, with total industry volume coming in at 135,140 units from January to March.

This was more than four per cent contraction as the industry continued to grapple with poor loan approvals and a market that adopted a wait-and-see approach to vehicle acquisition.

“The group’s automotive sector aims to enhance its performance through launches of new models and facelifts by marques within its stable.”

Revenue at the services sector rose 26.5 per cent year on year to RM4.49 billion, with Pos Malaysia and Alam Flora Sdn Bhd driving the growth.

“E-commerce growth will continue to be a prime driver for Pos Malaysia, eclipsing revenue from traditional mail. In 2016, fewer people sent traditional mail, with volume dipping 4.2 per cent,” said DRB-HICOM.

Parcel volumes, however, rose 7.8 per cent in the same year, and it is expected that last year as well as this year’s numbers will mirror this trend.

It said the services sector would continue its momentum with logistics, banking and concession businesses remaining as the key growth contributors.

“The aerospace business, via the composite manufacturing arm, is undergoing business expansion which is also on track to achieve higher growth.”

In the property sector, revenue came in at RM824.86 million, with construction projects supporting the performance.

“The rationalisation exercise of non-industrial assets is expected to be completed by the end of the year, in line with group’s strategic direction to have leaner property portfolio focusing on industrial land,” it added.

The group said it expected its overall businesses to improve this year.