Home Economy Business BAuto posts lower pre-tax profit, revenue for Q1’21

BAuto posts lower pre-tax profit, revenue for Q1’21

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PETALING JAYA: Bermaz Auto Bhd (BAuto) registered a 79.8% decrease in pre-tax profit to RM13.12 million in its first quarter ended July 31, 2020 from RM65.04 million in the preceding year’s quarter largely due to lower profit contribution from the domestic operations, and share of loss contribution from one of its associate companies, Mazda Malaysia Sdn Bhd (MMSB).

The lower profit contribution from the domestic operations was mainly attributed to lower unit sales and lower gross margin arising from aggressive promotional campaigns such as the free six years warranty and six years free maintenance to boost sales.

The negative contribution from MMSB was mainly due to the significant drop in unit sales with minimal orders from both the domestic and export markets during the movement control order (MCO) and conditional MCO periods.

It reported a lower revenue of RM448.89 million for the quarter under review from RM535.04 million in the preceding year’s corresponding quarter. Group revenue declined by 16.1% largely due to the drop in sales volume from both the domestic and the Philippine operations impacted by the Covid-19 pandemic. During the beginning of the quarter, businesses were still mandated by the respective governments to close for operations.

Subsequently, the group resumed its operations during the CMCO period in Malaysia and general community quarantine period in the Philippines but the trading conditions remain challenging as consumers are cautious in their “big-ticket” spending.

The group has also accounted for the expense relating to the group’s Employees’ Share Scheme amounting to RM800,000 in the quarter under review as compared to RM1.2 million in the preceding year’s corresponding period.

The board has approved and declared a first interim dividend of 0.5 sen or RM0.005 single-tier dividend per share in respect of the financial year ending April 30, 2021 to be payable on Nov 18, 2020.

On prospects, BAuto said among the Penjana economic stimulus packages introduced in June 2020 were the 100% sales tax exemption on completely knocked down vehicles and 50% sales tax exemption on completely build-up vehicles from June 15, 2020 to Dec 31, 2020 to help jump-start the automobile industry in the country.

“Although the sales tax reliefs and aggressive promotional campaigns by the group have produced encouraging results for the Malaysian operations, the group is nevertheless still cautious of the post Covid-19 pandemic impacts on the overall Malaysian economy and expects the automotive sector to remain challenging in 2020. Hence, any launch of new and/or new facelifts Mazda models will be dependent on market sentiments and the evolving economic conditions going forward,“ said BAuto.

Premised on the foregoing, the directors anticipate the operating performance of the group for the financial year ending April 30, 2021 to remain challenging.