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Wednesday, August 31, 2016

DRB-Hicom posts Q1 net loss of RM169m as Proton weighs

Tuesday, 30 August 2016 | MYT 6:41 PM
DRB-Hicom posts Q1 net loss of RM169m as Proton weighs

KUALA LUMPUR: DRB-Hicom Bhd posted net losses of RM169.30mil in the first quarter ended June 30, 2016 weighed down by losses from its car manufacturing operations under Proton.

The diversified group said on Tuesday the net losses widened from the RM19.72mil a year ago. Its revenue fell 15.2% to RM2.50bil from RM2.95bil. Loss per share was 8.76 sen to 1.02 sen. Its net asset per share was RM3.29 sen compared with RM3.38 a share.

DRB-Hicom said the decline in revenue was mainly due to lower sales volume of Proton vehicles and lower percentage of completion of AV8 project for the current quarter. It recorded a loss of RM209.18mil from the automotive sector compared with

The group incurred a pre-tax loss of RM121.34mil in Q1, FY17 compared with pre-tax profit of RM16.68mil a year ago mainly due to lower sales of motor vehicles by the automotive companies during the current quarter.

DRB-Hicom said in Q4 ended March 31, 2016, there were write down of inventories, impairment of certain intangible assets and project expenditure.

“In the competitive market conditions, the group will remain focused on its business consolidation to ensure the continuous growth and sustainability of its businesses,” it said.

It said the Group recently obtained approvals from shareholders to consolidate its logistics businesses via the integration of services by KL Airport Services Sdn Bhd, Konsortium Logistik Bhd and DRB-Hicom Asia Cargo Express Sdn. Bhd. into Pos Malaysia Bhd to streamline and enhance the synergies within postal and logistics businesses and to tap the demand of the e-commerce activities.

“The integration of logistic businesses within the group will reduce dependency on the automotive sector in the future. Upon the completion of the above exercise, the group’s equity interest in Pos Malaysia will increase to 53.50%, thus becoming a subsidiary company,” it said.

DRB-Hicom said it was also focused on the execution of Proton’s turnaround plan to develop a strong foundation for sustainable business.

It said Proton wasundertaking a request for proposal exercise to seek a strategic partner which could provide a strategic and operational business model to grow its automotive business.

“This exercise is expected to be completed in the first half of 2017 and its implementation is being closely monitored by the Task Force Committee formed by the fovernment to ensure the success of Proton's turnaround,” it said.

DRB-Hicom said Proton recently launched the new Perdana and Persona models and these launches are expected to improve the sales volume for the financial year.

However, it said on the back of slower overall economic growth, the group’s performance for the financial year ending March 31, 2017 will continue to remain challenging.

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