MBM Resources posts net loss in third quarter as foreclosure measures impact vehicle sales

KUALA LUMPUR (November 24): MBM Resources Bhd reported a net loss of RM 5.25 million for its third quarter ended September 30, 2021 (3QFY21), compared to net profit of RM 64.98 million in the same quarter of last year, amid full foreclosure measures implemented during the reporting quarter that affected its operations.

This was the second time the company has incurred losses in the past two years, the first being a net loss of RM 5.19 million that it recorded for the March to June quarter during the fiscal year 2Q20, just a month after the entry into force of the first containment measure for the pandemic in Malaysia. swing.

The automotive actor’s quarterly revenue fell 61.6 percent to RM 230.56 million in 3QFY21, from RM 600.45 million a year earlier, according to its stock exchange report. It posted a quarterly loss per share of 1.34 sen, against earnings per share of 16.63 sen previously. No dividend has been declared.

The group attributed the poor financial performance to the closure of its showrooms and vehicle manufacturing plants between June and mid-August, which resulted in a 63.2% drop in revenues from its auto trade segment to RM201.6million vs. RM547.43million, while its auto parts manufacturing segment saw its turnover drop 45.8% to RM28.5million from RM52.58 million RM.

Its share of the results in its joint venture also reported a meager profit before tax of RM321,000 for the quarter, compared to RM4.45 million previously, while it recorded a pre-tax loss of 6.2. million RM from its associates, profit of 55.4 million RM previously.

For its cumulative nine months ended September 30, 2021 (9MFY21), the group recorded a net profit of RM 58.41 million, down 32.88% from RM 87.02 million for 9MFY20, while revenue fell 21.36% to RM969.74million from RM1. 23 billion.

According to MBM Resources, it sold 72.9% fewer vehicles to 3QFY21 compared to 3QFY20, while vehicle sales for 9MFY21 fell 36.7% from 9MFY20.

The group said the decline in its financial performance for 3QFY21 was due to intermittent and prolonged blockages of enhanced movement control orders, which forced most industries, including the auto industry, to remain shut down. June to mid-August 2021, affecting its 3QFY21. This was accompanied by supply chain disruptions immediately after most industries reopened in mid-August 2021.

“[The] the outlook for 4QFY21 appears to be better. For the group, more than 99% of our employees have been fully vaccinated. As the challenges of the Covid-19 pandemic continue, coupled with slight supply chain disruptions, we are cautiously optimistic. This will be further strengthened by the group’s good order book and supported by the end-of-year promotion campaign for clients. The recent announcement of the 2022 national budget has also given positive hope to the automotive industry with the further extension of the OHS exemption and the various incentives for the introduction of electric vehicles in Malaysia, ”the group said on its outlook. for the remainder of the year 21.

MBM Resources shares stabilized at RM 3.22 on Wednesday, giving the group a market cap of RM 1.26 billion.

Ann J. Cox