By Xavier Kong
BERMAZ Auto Bhd (BAuto) has reported lower revenue and pre-tax profits for the fourth quarter of its 2020 financial year, following the mandatory closure of business of both its domestic and Philippines operations due to the Covid-19 pandemic.
The quarter, which ended April 30, saw BAuto reporting a revenue of RM299.4 mil, compared to the RM538.3 mil of the previous corresponding quarter. A lower pre-tax profit of RM3.2 mil was also reported, compared to the RM77.6 mil of the previous corresponding quarter.
“In Malaysia, no vehicle sales were recorded as the Road Transport Department was closed due to the Movement Control Order (MCO) imposed from March 18.
“Similarly in the Philippines, vehicle ownership certificates could not be generated and hence, no vehicle sales were registered during the Enhanced Community Quarantine imposed in Metro Manila and other areas from March 17 to May 15,” said BAuto in a statement.
In terms of its pre-tax profits for the quarter, not only was the auto player affected by Covid-19, resulting in lower contributions, there was also a lower share of profit contribution from Mazda Malaysia Sdn Bhd.
The group also incurred expenses relating to the group’s Employees’ Share Scheme amounting to RM800,000 in the quarter under review, compared to RM1.2 mil in the preceding year’s corresponding quarter.
In terms of its full financial year, the group registered a lower revenue of RM1.76 bil, compared to RM2.52 bil year-on-year due again to the lower sales volume from the domestic and Philippines operations.
The lower domestic sales volume was attributed to the delay in delivery of the new CX-5 and CX-8 models as pricing issues had to be resolved, as well as the closure of businesses during the final quarter.
Conversely, FY19 also recorded significantly higher unit sales due to the three-month sales tax holiday, boosted by the promotional campaign where the group would absorb the sales tax.
In terms of pre-tax profits, the group reported RM131.8 mil for FY2020, less than half of the RM340.6 mil yoy. Again, this was attributed to the lower contributions from domestic operations, lower share of profits from Mazda, and higher expenses relating to the group’s Employees’ Share Scheme.
Moving forward, while the Malaysian auto sector is expected to remain challenging in the near future, the group believes that the economic stimulus packages introduced by the Malaysian government will help soften the impact of the Covid-19 pandemic on the country’s economy, and “support the gradual normalisation of local economic activities while catering for the welfare of the people.”
This includes measures in the Short Term Recovery Plan (Penjana) under the Recovery MCO, announced on June 5, which will help the automotive industry as a catalyst to gradually drive market demand.
These measures are a 100% sales tax exemption on completely knocked down (CKD) models and a 50% sales tax exemption on completely built up (CBU) models from June 15 to Dec 31.
“The directors anticipate that the financial year ending 30 April 2021 will remain very challenging. Appropriate austerity measures are being implemented to mitigate the current conditions, such as the tightening of operational costs and overheads,” said the group.
At the end of the trading day, BAuto’s shares were at RM1.62, up 10 sen, with 14.7 million shares changing hands. – June 11, 2020
