MBM expects better 2018, tight-lipped on UMW offer

KUALA LUMPUR: MBM Resources Bhd, which hopes for better performance in the financial year ended Dec 31 (FY18), was tight-lipped on UMW Holdings Bhd’s extended offer to buy majority shareholder Med-Bumikar Mara Sdn Bhd’s 50.07% stake in MBM and the ongoing in-fighting at the Med-Bumikar shareholders level.
MBM chairman Datuk Abd Rahim Abd Halim said as the 22.5% shareholder of Perusahaan Otomobile Kedua Sdn Bhd (Perodua), MBM has not communicated to Perodua’s principal partner Daihatsu Motor Co Ltd or any other shareholders as there is no need to do that.
“I’m not sure whether they (Japanese partners) are worried or not but so far there’s no communication. The matter is still at the current company level,” he told reporters after the group’s AGM today.
It was reported that the exercise may put Med-Bumikar into a delicate position with Daihatsu, and that Daihatsu was unhappy over the proposed takeover.
“It’s hard to say (whether the tension from the UMW deal would affect its dealings with Daihatsu). But so far, all the various subsidiaries are not involved, only at the shareholders’ level,” said Abd Rahim, who is also Med-Bumikar chairman.
“I can’t say much. This is UMW’s call. The offer (by UMW) has been extended until the end of October and the various issues relating to Mara (Majlis Amanah Rakyat), the board, all are unchanged,” Rahim added.
MBM minority shareholders met at the AGM told SunBiz that UMW’s offer price of RM2.56 per share was low, and that it is at least worth RM2.80 a share.
Meanwhile, Rahim said MBM is hoping for better performance in FY18 with the absence of impairment this year and the removal of Goods and Services Tax that will boost car sales.
“As a supplier of components, we want Proton to do well so that we can supply more components to them. We supply safety belts, airbags, wheels, tyre assembly and components to them. When Proton’s volume drop, our volume also drop quite significantly,” said Abd Rahim. In its heyday, he said Proton contributed 30-50% to MBM’s revenue, some five to six years ago. Abd Rahim could not reveal current contribution, but said it was comparatively less significant.

He added that its wheel manufacturing unit Oriental Metal Industries (M) Sdn Bhd (OMI) still register losses, but it is targeting a turnaround by end of the year, driven by volume and price.
OMI Alloy (M) Sdn Bhd’s (OMIA) factory utilisation rate is expected to achieve 70% by Q4, from 50% now and is aiming to produce 45,000 alloy wheels per month by December, from 35,000 now.