KUALA LUMPUR (Nov 24): MBM Resources Bhd posted a net profit of RM60.8 million or 15.55 sen per share for the third quarter ended Sept 30, 2022 (3QFY2022) compared with a net loss of RM5.25 million or 1.34 sen per share for the same period last year, its bourse filing on Thursday (Nov 24) showed.

Revenue doubled or jumped 169.42% to RM621.17 million from RM230.56 million in the same period a year ago with better performances seen by both the group's motor trading and auto parts manufacturing divisions.

The automotive group said it is confident of closing the financial year with a record-breaking performance after swinging back to profitability in 3QFY2022 driven by high vehicle sales volume as carmakers were maximising their production volume to fulfil the extensive bookings received up to June 30.

Additionally, the corresponding quarter in 2021 was also a low base quarter with the Movement Control Order 3.0 full lockdown implemented from June 1, 2021 and only lifted by mid-August 2021.

Notably, MBM Resources' latest quarterly revenue is a fresh new high for the group, exceeding its previous record high of RM616.57 million recorded for 1QFY2013.

MBM Resources' motor trading division closed the quarter with a RM529.1 million revenue, an increase of RM327.5 million or 162.4% against the corresponding quarter, coming mainly from high vehicle sales volume.

This was as the various production challenges faced by carmakers and suppliers in the first half of the year eased slightly and carmakers worked towards maximising their production volume to fulfil the extensive bookings received up to June 30.

The group's vehicle supply from Perusahaan Otomobil Kedua Sdn Bhd (Perodua) also increased substantially in the current quarter, with the continuous improvement in aftersales revenue likewise boosted the division's performance for the quarter.

Similarly, MBM Resources' auto parts manufacturing division registered revenue of RM91.5 million for the quarter under review, RM63.1 million or 221.3% higher against the corresponding quarter, with the growth coming from higher production volume pulled by the carmakers to meet increased demand.

For the cumulative nine months ended Sept 30, 2022 (9MFY2022), MBM Resources' net profit went up three-fold or surged 283.75% to RM224.14 million from RM58.41 million as 9MFY2022 revenue grew 70.84% to RM1.66 billion from RM969.74 million.

In light of the strong 3QFY2022 performance, MBM Resources foresees this trend to continue into the next quarter, backed by high outstanding orders collected prior to the expiry of the sale and service tax exemption period on June 30, and the commitment given by the major original equipment manufacturers (OEMs) to fulfil these orders before the March 31 deadline next year.

The introduction of new models as well as the year-end promotion by the OEMs, noted MBM Resources, are expected to further boost the demand for vehicles in the coming quarter.

Despite the bullish sentiment, MBM Resources is cautious about the group's performance given the current headwinds of further appreciation in US dollar and China's Covid Zero policy lockdown.

It cited that the strengthening of the US dollar is expected to squeeze margins as cost of materials is envisaged to rise further whilst China's lockdown will affect the supply of components and parts to certain OEMs in Malaysia.

"The group, however foresees the cost management exercise undertaken and the anticipated higher sales volume particularly from Perodua in the fourth quarter, will be able to cushion some of these impacts," it said.

MBM Resources' share price finished one sen or 0.3% higher at RM3.31 on Thursday, bringing the group a market capitalisation of RM1.29 billion.