Bermaz Auto Berhad reported lower revenue and higher pre-tax profit of RM320.8 million and RM14.5 million respectively in the current quarter as compared to the revenue and pre-tax profit of RM448.9 million and RM13.1 million for the same period in 2020.
The group indicates the reduction in the revenue of RM128.1 million or 28.5% was largely due to lower sales volume registered from the domestic operations attributed to the full lockdown under Phase 1 of the National Recovery Plan where all showrooms were not allowed to operate for 2 months since the beginning of June 2021.
However, despite the drop in revenue, Bernaz pre-tax profit improved slightly by RM1.4 million or 10.4% largely due to a lower share of loss from one of its associated companies, Mazda Malaysia Sdn Bhd (“MMSB”) and higher profit contribution from the domestic operations. The lower share of loss from MMSB during the quarter was due to lesser impact in June and July 2021 as compared to the corresponding quarter of the previous year where the unit sales were low during the whole quarter. The higher profit contribution from the domestic operations despite registering lower sales was primarily due to cost-saving measures implemented.
The Group has also accounted for the expense relating to the Group’s Employees’ Share Scheme amounting to RM0.5 million in this quarter under review as compared to RM0.8 million in the corresponding quarter of the previous year.
In reflection of the automotive outlook, the Malaysian Automotive Association reported that the local automotive industry had suffered huge losses since June when the motor vehicle production plants and distribution and sales centres (especially in the Klang Valley) were halted. Car dealers posted total losses of more than RM14.0 billion in June and July due to the sharp plunge in sales of vehicles in the domestic market following the imposition of the Movement Control Order. The shutdown affected not only the automotive companies but also the entire automotive ecosystem nationwide. Based on MAA’s latest statistics, sales amounted to only 1,921 units and 7,086 units for June and July 2021 respectively. On average, sales or better known as total industry volume (“TIV”) is between 45,000 to 50,000 units per month.
Although the economy is gradually reopening and there is more relaxation on the containment measures, the outlook for the automotive industry remains volatile and uncertain in view of the resurgence of COVID-19 cases and is very much dependent on the ability to contain the pandemic and the continued progress and effectiveness of the country’s national vaccination programme in curbing it.
The situation is no different in the Philipines where Bernaz operates as well, the government there has imposed further lockdown to curb the spike in daily COVID-19 cases and the spread of the highly contagious Delta variant. This will have an impact on the outlook of the economy for the rest of the calendar year. Premised on the foregoing, Bernaz anticipate the performance of the Group for the remaining quarters of the financial year ending 30 April 2022 to remain challenging and uncertain.