PETALING JAYA: BERMAZ AUTO BHD’s net profit for its first quarter surged more than two-fold to RM50.2mil from RM20.2mil a year ago, on the back of higher revenue and improvement in gross profit margin from its domestic operations.
The group also attributed the higher profit, for the period ended July 31, to the higher share of profit contribution from its associate company, Mazda Malaysia Sdn Bhd (MMSB).
In its filing with the stock exchange, the group said the improvement in gross profit margin was mainly due to a favourable sales mix and a stronger ringgit against the Japanese yen.
The higher share of profit contribution from MMSB, meanwhile, was on the back of an increase in production volume for the new CX-5 model, to cater for both the domestic and export markets.
However, it said, this was partly offset by a lower profit contribution from the Philippines’ operations, in line with the drop in sales volume mainly on Mazda2 and Mazda3 models, and higher cost of sales due to the weakening of the Philippine peso.
The group also noted that the 24% increase in its revenue for the period, at RM485.3mil, was mainly due to an improvement in the sales volume from the domestic operations as the zero-rating of the goods and services tax (GST) in June boosted customer demand, especially for the new CX-5 model.
“This was partly offset by a drop in the sales volume from the Philippines’ operations subsequent to the implementation of the Tax Reform for Acceleration and Inclusion (Train) law in January this year,” it said.
It said the Train law caused an increase in the excise tax and consequently an increase in car prices, thus affecting demand for motor vehicles in the Philippines.
Moving forward, the group said although the automotive industry had benefitted from the zero-rating of the GST, the surge in the demand between June and August 2018 would be equalised in the long term.
This is as the sales volume is expected to dip after the implementation of the sales and service tax.
In the Philippines, although the economy is forecast to remain vibrant, the implementation of the Train law has resulted in the contraction of demand for auto brands, it said.
The group hopes to maintain its sales volume through the growth in the number of dealerships in the country.