MBM Resources 1Q net profit jumps on disposal gain

KUALA LUMPUR (May 25): MBM Resources Bhd’s net profit in the first quarter ended March 31, 2022 (1QFY22) surged by 89.84% to RM89.28 million from RM47.03 million in the same quarter a year ago, as the group recognised a one-off gain from disposal of a piece of leasehold land with factory buildings and some plant and machinery.

Besides the disposal gain, the group's revenue rose 14.39% to RM478.51 million from RM418.31 million, underpinned by higher contribution from its motor trading and auto parts manufacturing divisions. As such, earnings per share increased to 22.85 sen from 12.03 sen, its bourse filing showed.

However, compared with the immediate preceding quarter of 4QFY21, the group’s net profit dropped 18.47% from RM109.52 million, while revenue slid 14.88% from RM562.19 million — mainly because vehicle supply in the first quarter tends to be lower post-year end, partly due to the shorter working month in February.

"Some carmakers' productions were also affected by, among others, semiconductor chip shortages and logistics issues. With the lower revenue, profit before tax for the group likewise registered a reduction of RM38.6 million or 28.2% compared with the preceding quarter," MBM Resources said.

Going forward, despite its improved year-on-year performance, MBM Resources said there are underlying concerns due to the shortage of chips and components, with delays in containerised shipments of components still clouding the industry.

“Nevertheless, we remain cautiously optimistic that our results in the coming quarter are expected to be better given the current high unfulfilled order banks and the sales push towards the end of the sales tax holiday period on June 30, 2022.

“The group’s strong financial standing with positive cash position and low borrowings is expected to insulate the group from the threats of material price increase and recent appreciation of the US dollar. The multi-brands represented within the group, particularly Perodua, is expected to assist in cushioning the impact of the forex appreciation from foreign marques,” it added.

Shares in MBM Resources ended two sen or 0.63% higher at RM3.19 on Wednesday, giving it a market capitalization of RM1.25 billion.