MBM Resources' 4Q net profit halves to RM57.4m, declares 21 sen dividend

KUALA LUMPUR (Feb 20): Automotive trader and parts manufacturer MBM Resources Bhd’s net profit for the fourth quarter ended Dec 31, 2022 (4QFY2022) fell by 49% to RM57.41 million from RM112.81 million a year ago due to higher operating costs and lower contributions from associates.

However, quarterly revenue increased by 16.5% to RM651.40 million from RM558.92 million in 4QFY2021, thanks to higher revenue from both its motor trading and auto parts manufacturing divisions, the company said in a filing with Bursa Malaysia on Feb 20.

Despite its poorer quarterly performance, for the full year ended Dec 31, 2022 (FY2022), the group posted its best-ever net profit, surging 65% to RM281.55 million from RM171.22 million in FY2021.

Its record-breaking performance was driven primarily by high production demand from carmakers and the highest ever contributions from its associates.

Correspondingly, FY2022 revenue increased by 50.9% to RM2.30 billion from RM1.52 billion in FY2021, thanks to its motor trading and auto parts manufacturing divisions, which achieved record-high revenue from the sales tax exemption, higher vehicle supplies, improved operating conditions and production demand.

MBM added that the corresponding period in 2021 was also not a comparable year with the Movement Control Order 3.0 full lockdown implemented from June 1, 2021 to mid-August 2021.

The group added that given the record high total industry volume of 720,658 units for 2022, the motor trading division achieved a 49.7% increase in the total group vehicle sales volume.

Its auto parts manufacturing division likewise registered revenue of RM316.1 million for the period under review, which is RM109.5 million or 53% higher than the corresponding period.

The board declared a second interim single tier dividend of six sen per share amounting to approximately RM23.45 million and a special single tier dividend of 15 sen per ordinary share amounting to RM58.63 million for FY2022.

The group said it remains cautiously optimistic on the outlook in 2023 due to expected moderation in the economy, high inflation rate and increased costs of borrowing that could negatively affect consumer demand.

“The market will be driven by the rush to deliver the backlog orders before the end of March 2023, the introduction of new models and the sale of recently launched electric vehicles. In addition, the group will continue to mitigate rising operating costs through improvement in process efficiency and productivity,” MBM said in the filing.

Shares of MBM closed 2.43% or nine sen higher at RM3.79, giving it a market capitalisation of RM1.48 billion.