Quick take: BAuto shares fall 2.8% after missing profit expectations


  • Stock on the Move
  • Wednesday, 11 Dec 2019

KUALA LUMPUR: Shares in BERMAZ AUTO BHD (BAuto) fell 2.8% in early trade Wednesday after its net profit in the second quarter ended Oct 31,2019 fell 72%.

The distributor of Mazda vehicles fell 2.79%, or six sen to RM2.09.

Its net profit fell 72.42% in the second quarter ended Oct 31 to RM20.39mil from RM73.92mil, largely due to lower contribution from domestic operations, as well as from its associate company Mazda Malaysia Sdn Bhd.

The group has recommended 2.75 sen in dividend per share for the quarter, bringing the total dividend in the first half of FY20 to 6 sen, from 6.25 sen previously.

Quarterly revenue fell 33.77% to RM457.17mil, from RM690.32mil.

In the first six-month period ended Oct 31, BAuto's net profit fell 42.91% to RM70.9mil from RM123.2mil a year ago, as revenue fell 15.61% to RM992.21mil from RM1.18bil.

MIDF Research said BAuto reported a weak set of results for its 2QFY20.

The group registered a core net profit of RM22mil for its 2QFY20 bringing 1HFY20 core net profit to RM73mil (normalised for ESOS expense of RM2.3mil).

“This is behind expectations accounting for 28% and 29% of our and consensus estimates respectively.

“However, we expect the weakness to be temporary. An interim dividend of 2.75sen per share was declared bringing 1H20 interim dividend to 6sen/share, representing a generous 95% payout, ” MIDF said.

The research house said the weak 2QFY20 earnings were due to the delay in deliveries of the all new CX8 (launched in Oct 2019) and facelift CX5 (launched Sept 2019) which was a result of the delay in regulators’ pricing approval of these models.

MIDF has maintained its “buy” call on BAuto at unchanged SOP-derived target price of RM2.85.


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