Highlight DRB-Hicom posts loss in 1Q, warns of a "very challenging year"

by **Cals** Fri 28 Aug 2015, 04:09

Highlight
DRB-Hicom posts loss in 1Q, warns of a "very challenging year"

KUALA LUMPUR (Aug 27): DRB-Hicom Bhd, which wholly owns national car maker Proton Holdings Bhd, slipped to a net loss of RM19.72 million in the first quarter ended June 30, 2015 (1QFY16) from a RM107.84 million net profit a year earlier, dragged by lower sales of motor vehicles during the current quarter.
It incurred a loss per share of 1.02 sen in 1QFY16 compared with an earnings per share of 5.58 sen in 1QFY15.
Revenue for 1QFY16 fell 20.8% to RM2.95 billion from RM3.72 billion a year ago.
DRB-Hicom’s automotive business had suffered a 22.12% drop in revenue in 1QFY16. Automotive contributed 76% to the group’s total revenue.
In a statement today, DRB-Hicom said the automotive industry is currently experiencing challenging motor vehicles sales due to various factors including more stringent loan approval policies coupled with weaker consumer sentiments and more intense competition.
The group warned that the current financial year ending March 31, 2016 (FY16) to be a "very challenging year".
"DRB-Hicom as a group, with a diverse portfolio of products and services across various business sectors, has been affected by the current market sentiments and challenging economic and business landscape," it added.
To mitigate the impact of the current market conditions, DRB-Hicom said it has initiated various cost management measures and will continue to put emphasis on improving operational efficiency in all its businesses.
DRB-Hicom (fundamental: 0.3; valuation: 2.4) shares closed unchanged at RM1.32 today, giving it a market capitalisation of RM2.55 billion. The counter has fallen 22.7% from RM1.70 since beginning of the year.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)