Thursday, August 11, 2011

MBM Resources 2Q net profit falls 45.6% to RM21.11m

KUALA LUMPUR: MBM RESOURCES BHD [] net profit for the second quarter ended June 30, 2011 fell 45.6% to RM21.11 million from RM38.78 million a year earlier, due mainly to full impact of the parts supply disruption from the recent earthquake in Japan.

Revenue for the quarter dipped to RM382.02 million from RM404.82 million. Earnings per share was 8.69 sen while net assets per share was RM4.36.

The company declared a first interim dividend of 6 sen per share exempted (single tier dividend) for the financial year ending Dec 31, 2011 to be paid on Sept 15.

For the six months ended June 30, MBMR's net profit fell to RM59.51 million from RM78.72 million in 2010, on the back of revenue RM791.83 million.

Reviewing its results, MBMR said on Thursday, Aug 11 that its overall performance was impacted by the shortage of parts supply as a result of the earthquake in Japan, of which the full impact was felt in the second quarter.

Additionally, in the month of June, the introduction of the new Hire Purchase Act had some temporary disruption to the process of order taking, it said.

The company said the financial results performance however was not a true reflection of the fundamental strength of the business and the continued progress the group had made during the year.

It said the new model launches during the quarter, including the Volvo S60, the additional Volvo XC60 T5 variant and the all new Perodua Myvi had all been well received.

'The outstanding orders are healthy. Progress was also made in the aftersales business as we continue to upgrade our facilities to grow the throughputs to support the increased vehicle sales of recent years,' it said.

On its prospects, MBMR said it had high outstanding orders in hand.

'With the quick recovery in the parts supply situation in Japan, the focus for the current quarter is to increase production and to fulfil these orders.

'The sales momentum is also expected to be sustained by the newly launched Perodua Myvi which was only introduced at the end of June,' it said.

The company said a lineup of new product launches by its principals in the second half of the year was also expected to strengthen its performance in the coming months.

MBMR said its initiatives in the aftersales business was beginning to gain momentum as evidenced by the increased throughputs to its service centres.

It said the challenges for the quarter were to ensure the rate of recovery in the supply of vehicles could be accelerated to meet outstanding orders.

'Additionally the Yen strength may put pressure on margins due to our exposure through the importation of parts from Japan. Tight cost controls and the ongoing localisation programmes will help reduce this impact.

'We expect the third quarter to show an overall improvement in performance,' it said.


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