Highlight MBM Resources gets shareholders' nod for buyback

by **Cals** Thu 19 May 2016, 23:50

Highlight

[size=28]MBM Resources gets shareholders' nod for buyback

By Billy Toh / theedgemarkets.com | May 19, 2016 : 3:18 PM MYT
KUALA LUMPUR (May 19): MBM Resources Bhd (MBMR), which posted a 47.6% decline in first quarter net profit due to one-off gains last year, today got shareholders' approval to buy back up to 10% or 39.07 million of its own shares that the company's management thinks are undervalued.
"We feel that our shares have declined significantly over the last 12 months and is trading at a steep discount to the value of its net tangible asset," its managing director Looi Kok Loon told reporters after the company's annual general meeting today.
Based on MBMR's first quarter report ended March 31, 2016 (1QFY16), its net asset per share stood at RM4.02, while its share price was trading at RM2.18 as at 2.36pm today.
Its share price has fallen by 36% from last year when it was trading at RM3.43 on May 19, 2015
The mandate for the share buyback is for a one-year period, according to Looi.
He added that the share buyback is a further mechanism that the company chose to take to return value to its shareholders.
Yesterday, the automotive group reported that its net profit for 1QFY16 dropped by 47.6% to RM18.4 million or 4.71 sen per share from RM35.14 million or 8.99 sen per share a year ago, mainly due to the recognition of a one-off property contribution in 1QFY15 and lower vehicle sales and production volumes in 1QFY16.
Revenue for 1QFY16 also came in 36.8% lower at RM373.94 million from RM591.74 million in 1QFY15, mainly due to lower revenues from both its motor trading and auto parts manufacturing divisions.
At 2.45pm, MBMR shares fell two sen or 0.91% to RM2.18 with 8,300 shares traded.
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