Lower Mazda sales volume hits Bermaz Auto’s results

Mazda Motor Corporation / Mazda South East Asia Executive Officer and President Hiroshi Inoue (2nd left) and Bermaz Motor Chief Executive Officer / Executive Director Datuk Sri Ben Yeoh (2nd right) during the offcial launch new Mazda SkyActiv diesel models in Subang Jaya, yesterday..

KUALA LUMPUR: Mazda vehicle distributor Bermaz Auto Bhd posted earnings of RM25.1mil for the third quarter (Q3) ended Jan 31, 2017, down 39% from the same period a year earlier.  

The company (formerly Berjaya Auto Bhd) told Bursa Malaysia that the fall in profit was due to the 35% lower revenue of RM338.7mil, weaker results from associated companies and higher vehicle cost as the ringgit continued to be weak.

Bermaz Auto, which operates in Malaysia and the Philippines, said softer consumer demand had impacted domestic sales while supply constraint on certain Mazda model and competitors’ new model launches had affected sales in the Philippines.

“This was further aggravated by intense competition in the domestic market where sales were predominantly driven by aggressive discount promotion activities by the competitors,” it added.

However, the lower profit was mitigated by a drop in operating expenses as the group took measures to reduce operating cost, the car retailer said. 

For the first nine months of the financial year ending April 30, 2017 (FY17), Bermaz Auto’s earnings fell 34% to RM96.8mil while revenue slid 17% to RM1.3bil.

The board has recommended a higher third interim dividend of 2.75 sen (2.15 sen previously), which raised the total dividend declared to 8.5 sen (6.9 sen previously).

On its future prospects, Bermaz Auto said the last quarter of this financial year was expected to remain challenging for the group.

In Malaysia, sales are forecast to remain subdued in light of the current economic condition and persistent weak ringgit.

However, Bermaz Auto said, the group was optimistic that the new model launches planned for next financial year would place the local operation in a better position and help lessen the impact from an expected soft domestic market.

In a press statement, the company said it expected the Philippine operations to continue to contribute positively to its overall performance and help offset the slowdown in the domestic market.

Its 60.4% owned indirect subsidiary Bermaz Auto Philippines (BAP), which seeks to raise funds via a listing on the Philippine Stock Exchange, is expected to benefit from the Philippines’ strong economic growth and buoyant demand for passenger cars.

“Part of the proceeds to be raised will be utilised for the building of satellite outlets, warehousing, a body repair and paint shop facility, and the establishment of an automotive academy. These new facilities will further enhance Mazda’s brand image in the Philippines,” Bermaz Auto said.