DRB-Hicom records net loss in Q3

PETALING JAYA: DRB-Hicom Bhd sank into a net loss totalling RM58.15 million for the third quarter ended Dec 31, 2017, compared to earnings of RM351.86 million a year earlier, mainly due to one-off impairment charges of certain intangible assets and potential claims relating to Proton.
Revenue for the quarter declined 11.2% to RM3.05 billion, from RM3.43 billion in the same period in 2016.
In a statement, the group said the automotive sector revenue mirrors the industry’s soft climate, with the anticipated traditional December sales slipping by almost 16% compared to the year before.
Furthermore, it said the lower loan approvals as well as higher interest rates also continue to affect sales for the industry.
“With the entry of Zhejiang Geely Holding Group (Geely) as a shareholder of Proton Holdings Bhd, the national carmaker intends to deploy Geely’s wide array of technology and family of engines in Proton’s current range of vehicles, while other models in Geely’s range is also being considered for local consumption,” it added.
However, the group said its services sector saw revenue rise by 35% in the nine months period, coming in at RM3.28 billion, driven by improved numbers from Pos Malaysia’s courier and logistics segments.
It added that the property sector contributed a revenue of RM638.8 million, with the sector’s construction related projects boosting the performance.
For the nine-month period, the group posted a net profit of RM508.7 million, against a net loss of RM127.07 million a year ago, while revenue up 13% to RM9.73 billion, from RM8.58 billion previously.
With the improving economy, DRB-Hicom said it will continue to strengthen its core businesses and pursue various opportunities to expand its business interests, with a key focus on growth in logistics, e-commerce, aerospace and banking.
Nevertheless, for the automotive industry, it said stiff market competition, stringent hire purchase approvals, higher interest rates, among others, remain as challenges.
“In this light, the on-going cost and financial management efforts across all sectors will provide stability for the long-term prospects of the group.”
“DRB-Hicom’s full year results ending March 31, 2018 is expected to be better than the previous year, as a result of cost management and operational efficiency initiatives that are currently on-going across the group,” it added.