MBM Resources Q1 net profit rises 69%

PETALING JAYA: MBM Resources Bhd’s net profit for the first quarter ended March 31 rose 69% to RM32.82 million from RM19.43 million a year ago due to improved sales from both motor trading and auto parts manufacturing divisions as well as higher profits from the associates and joint venture entity.
The group’s revenue increased by 10.9% to RM463.46 million compared with RM418.07 million in the previous year’s corresponding quarter mainly due to higher sales volume especially from the new Myvi.
Although the group’s vehicle sales volume have shown improvements in the current quarter, MBM anticipates continuous challenges in the coming quarters given the subdued demand for vehicles, intense competition in the market, stringent hire purchase loan approvals and volatile foreign currency fluctuations, among others.
However, the reduction in the prevailing rate of Goods and Service Tax from 6% to 0% should have a positive effect on car sales until the Sales and Service Tax is reintroduced, it said.
“Management’s efforts to further refine the group’s marketing strategies and production efficiencies are ongoing, likewise for the cost reduction initiatives. Management continues to take all measures to address the problems faced by the alloy wheel operations. These efforts are expected to strengthen the group’s financial position moving forward.”
MBM has been in the news, after a RM2.56 per MBM share offer by UMW Holdings Bhd to takeover majority shareholder Med-Bumikar Mara Sdn Bhd’s 50.07% interest in MBM caused in-fighting at the Med-Bumikar shareholders level. UMW Holdings is eyeing MBM’s prized possession, a 22.58% effective equity interest in Perusahaan Otomobil Kedua Sdn Bhd.