Bermaz Auto Bhd delivered a stronger-than-expected financial performance for the financial year ended April 30, 2026 (FY26), with earnings surpassing both analyst and consensus forecasts on the back of a faster-than-anticipated turnaround by its associate companies.
According to a research note by Kenanga Investment Bank, BAuto’s FY26 core net profit came in 24 per cent above its forecast and 30 per cent ahead of market consensus estimates, driven largely by improved contributions from associates, particularly Mazda Malaysia Sdn Bhd.
The automotive group also declared an interim dividend of 1.75 sen per share and a special dividend of 1.75 sen per share for the fourth quarter, bringing total FY26 dividends to 7.25 sen per share.
Fourth-Quarter Revenue Declines Despite Profit Growth
For the fourth quarter of FY26 (4QFY26), BAuto’s revenue fell 20 per cent quarter-on-quarter as average selling prices weakened and sales volumes moderated.
The decline was attributed mainly to a sales mix skewed towards the lower-priced but higher-margin Mazda3 1.5-litre completely built-up (CBU) model, alongside weaker sales of the Mazda CX-5, which fell 25 per cent as customers delayed purchases ahead of the launch of the all-new Mazda CX-5 MS LE.
The new model is expected to make its debut at the upcoming Kuala Lumpur International Mobility Show (KLIMS) 2026, with vehicle deliveries scheduled to begin in August.
Sales volumes also softened across several brands. Mazda vehicle sales declined 7 per cent, while sales of XPeng electric vehicles dropped 41 per cent due to limited CBU inventory ahead of the commencement of local completely knocked down (CKD) production in July 2026.
The group also continued to feel the impact of the gradual phase-out of its Kia and Peugeot vehicle businesses.
Mazda3 1.5-litre models accounted for 42 per cent of total fourth-quarter vehicle sales, supported by demand for the CX-30, CX-5, CX-60 and CX-8 models.
Associate Turnaround Boosts Earnings
Despite lower revenue, BAuto’s fourth-quarter core net profit surged 43 per cent quarter-on-quarter, supported by a more favourable product mix and a sharp improvement in associate company earnings.
Associate companies collectively returned to profitability, contributing RM2.3 million compared with losses of RM11.3 million in the preceding quarter.
A key contributor was Mazda Malaysia Sdn Bhd, which posted a profit of RM4.2 million compared with a loss of RM1.5 million in the third quarter.
Losses at Kia Malaysia Sdn Bhd also narrowed significantly to RM2 million from RM10.6 million previously.
FY26 Revenue and Profit Weighed by Weak First Half
For the full financial year, BAuto’s revenue declined 13 per cent year-on-year due to weaker Mazda vehicle sales, which fell 14 per cent, alongside lower Kia sales and the complete disposal of its Peugeot dealership operations.
The weakness was partly offset by strong demand for XPeng electric vehicles, where sales surged 82 per cent during the year.
Geographically, sales declined in both Malaysia and the Philippines, falling 12 per cent and 14 per cent respectively amid intensifying competition in the automotive sector.
Core net profit dropped 33 per cent year-on-year, primarily due to a challenging first half marked by an unfavourable sales mix and weaker associate performance.
Associate earnings were dragged down by lower production volumes at Mazda Malaysia, whose profit declined to RM3.5 million from RM11.4 million a year earlier.
Meanwhile, Inokom Corporation Sdn Bhd slipped into a RM4.2 million loss compared with a RM1.7 million profit previously, while Kia Malaysia’s losses widened substantially to RM23.6 million from RM300,000 in FY25.
Analysts Raise Earnings Outlook
Following the stronger-than-expected recovery among associate companies, Kenanga raised its FY27 and FY28 net profit forecasts for BAuto by 6 per cent each.
The research house said the revised projections reflect confidence that associate earnings, particularly from Mazda-related operations, will continue to improve, providing support for the group’s profitability despite a competitive automotive market and ongoing business transition within its vehicle portfolio
