Bermaz Auto's Q1 net profit more than doubles to RM50.28m

PETALING JAYA: Bermaz Auto Bhd's net profit for the first quarter ended July 31, 2018 more than doubled to RM50.28 million from RM20.21 million a year ago, largely due to higher revenue and improvement in gross profit margin from domestic operations, and higher share of profits from its associate company Mazda Malaysia Sdn Bhd.
Its revenue jumped 24.1% to RM485.40 million from RM391.23 million a year ago mainly due to improvement in sales volume from the domestic operations as the change in goods and services tax (GST) from the standard rate of 6% to 0% in June this year has boosted customer demand, especially for the new CX-5 model.
The board has recommended a first interim dividend of 2.50 sen single-tier dividend per share in respect of the financial year ending April 30, 2019 to be payable on Oct 26, 2018. The entitlement date has been fixed on Oct 10, 2018.
With the implementation of sales and service tax (SST) on Sept 1, 2018, the group is absorbing SST for customers who have placed their bookings for Mazda cars prior to Sept 1, 2018, but are only to receive delivery after that.
The move which is to build customer loyalty, is expected to increase costs and reduce the group's profitability in the coming quarter, but can be mitigated through lower sales volatility after August this year, potentially higher sales volume, reduced marketing and advertising expenses and dealer incentives.
In the Philippines, the group said although the economy is forecasted to remain vibrant with expected GDP growth of 6.7% for 2018 and 6.8% for 2019, the implementation of the Tax Reform for Acceleration and Inclusion law effective January 2018 has resulted in the contraction of demand for most, if not all, auto brands.
Bermaz Auto Philippines seeks to preserve its sales volume through growth in the number of dealerships from 18 at the beginning of the financial year 2018 to 21 dealerships expected at the end of the financial year 2019, as well as new model introductions which are expected to contribute to a reasonable growth rate.