BAuto Q1 pre-tax profit at RM31.7m

PETALING JAYA: Bermaz Auto Bhd’s (BAuto) pre-tax profit for the first quarter ended July 31, 2017 fell to RM31.7 million from RM58.6 million a year ago due to lower revenue.

BAuto recommends a first interim dividend of 1.50 sen single-tier dividend per share for the financial year ending April 30, 2018 payable on Oct 27, 2017. The entitlement date has been fixed on Oct 11, 2017.

In a filing with Bursa Malaysia yesterday, the group said the lower revenue was in line with lower sales volume, compressed gross profit margin from intense competition and lower profit contribution from associate company Mazda Malaysia Sdn Bhd.

“The drop in profit margin in the domestic market was partly caused by the Mazda CX-5 run-out programme as more sales incentives were given for this model since the preceding quarter in anticipation of the new CX-5 model to be launched in October this year,” it said.

It added that the lower profit contribution from Mazda Malaysia was mainly due to lower unit sales and margin, as the group is phasing out the current CX-5 model to gear up for the upcoming new CX-5.

During the quarter, revenue fell 20.7% to RM391.2 million from RM493.6 million a year ago due to lower domestic sales volume, particularly for the CX-5 run-out model and ageing Mazda3 model which faced intense competition from new models launched by other comparable brands.

“This was partially mitigated by the improved sales performance from the group’s Philippine operations,” BAuto said.

Moving forward, the group expects market trading conditions to remain challenging despite the marginal 5% improvement in Malaysia’s total industry volume for the first seven months of 2017.

This is due to the competitive trading environment and weak consumer sentiment as a result of uncertainties in the local and global economy.

“Although the group’s units sales had deteriorated in the first seven months of the calendar year 2017 compared to the corresponding period in 2016, the group will continue to remain disciplined and focus on driving sales at its standard selling price with value offerings as this augurs well for the Mazda brand image and popularity in the longer term,” it said.

It is optimistic that the new CX-5 to be launched next month will help to improve unit sales as well as profit contribution from associated companies for the second half of the financial year 2018.