Strong demand for Proton lifts DRB-Hicom in 3QFY22

PETALING JAYA (Nov 24): DRB-Hicom Bhd continues its march to profitability this year, with a sterling performance in the third quarter ended Sept 30, 2022 (3QFY22), when the conglomerate recorded a net profit of RM143.95 million, almost reversing the net loss of RM179.44 million in the corresponding quarter in 2021.

During the quarter, the group recorded RM4.54 billion in revenue, which was more than double the RM2.12 billion revenue in the corresponding quarter in 2021. This enabled the group to record a profit before tax (PBT) of RM249.96 million, which more than revered the pre-tax loss of RM201.42 million in 3QFY21.

The positive financial results were attributed to the better performance across the group’s operating segments, especially the automotive, banking as well as the aerospace and defence sectors, said DRB-Hicom in a statement accompanying its financial results announcement to Bursa Malaysia on Nov 24.

“The higher revenue was mainly attributed to the higher sales from PROTON as well as higher revenue from manufacturing & engineering and automotive distribution companies. In the corresponding quarter, the revenue for July and August was significantly affected by the lockdown and restriction of business activities under Phase 1 and 2 of the National Recovery Plan.

“The business operations were resumed after the re-opening of economic activities as announced by the government in mid-August 2021,” said DRB-Hicom in the financial results announcement for the quarter and period ended Sept 30, 2022 on Nov 24.

In respect of the nine-month period ended Sept 30, 2022 (9MFY22), DRB-Hicom’s revenue increased 35.3% year-on-year to RM11.16 billion compared with RM8.25 billion in the corresponding period ended Sept 30, 2021 (9MFY21). This improvement led to a pre-tax profit of RM483.12 million, compared to the pre-tax loss of RM444.64 million in 9MFY21.

“DRB-HICOM’s Automotive Sector brought in RM8.01 billion in revenue in the first nine months of this year, a 54.7% improvement from the corresponding period last year (1Q-3Q 2021: RM5.17 billion). This higher revenue was mainly from national carmaker PROTON, Automotive Distribution companies, and Manufacturing & Engineering companies.

“These companies were significantly affected by the Covid-19 pandemic and the Movement Control Order in the previous year. PROTON’s revival continues as its models received updates in 2022, leading to it to breach the 100,000 mark at the end of September with 102,353 units delivered,” said DRB-Hicom.

The automotive segment recorded RM247.5 million of PBT, RM183.37 million in share of results of joint ventures (net of tax) and RM113.27 million of share of results of associated companies (net of tax) in the financial period ended Sept 30, 2022 (9MFY22).

On a quarter-on-quarter basis, DRB-Hicom’s pre-tax profit of RM249.96 million was higher than the pre-tax profit of RM229.16 million in the quarter ended June 30, 2022, mainly due to higher profit from the automotive as well as aerospace and defence sectors.

The group anticipated a better financial performance for the current financial year ending Dec 31, 2022, compared with the previous financial year, it said in the financial results statement. This is based on the encouraging growth in sales volume at PROTON, as well as transformation at its banking and postal services segments.

PROTON’s total sales for the 9MFY22 exceeded the 100,000-units, at 102,353 units, compared with 73,107 units in the corresponding period. DRB-Hicom opines that the total industry volume (TIV) of the automotive industry remains on track to achieve the forecast of 630,000 units this year.

“In addition, this encouraging growth in sales volume drove better performance for the manufacturing & engineering companies within the group as they form part of PROTON’s supply chain. Meanwhile, the positive acceptance of products from all marques within the group including Honda, Mitsubishi, Isuzu and Volkswagen is expected to elevate DRB-Hicom’s overall automotive performance,” the group said.

DRB-Hicom ended trading on Thursday 6 sen or 4.62% higher at RM1.36 per share, valuing the group at RM2.63 billion.