DRBHCOM (1619) - DRB-Hicom turns its earnings around in 3Q on Corwin disposal gain
KUALA LUMPUR (Feb 28): DRB-Hicom Bhd's RM398.1 million disposal gain from the sale of its 90% stake in Corwin Holding Pte Ltd turned its third quarter earnings around.
Its net profit for the third quarter ended Dec 31, 2016 (3QFY17) stood at RM353 million or 18.26 sen per share. It registered a net loss of RM186.2 million or 9.63 sen per share in 3QFY16.
DRB-Hicom said in a filing with Bursa Malaysia that 3QFY17 net profit was also propped up by the improved performance of companies in the automotive and services sectors.
Revenue climbed 2.9% to RM3.4 billion compared to RM3.3 billion in the previous year mainly due to a first time recognition of revenue from its 53.5%-owned subsidiary Pos Malaysia Bhd.
For the cumulative nine-month period (9MFY17), its net loss narrowed to RM125.9 million from RM202 million a year ago as a result of a one-off exceptional loss on re-measurement of previously held equity interest in Pos Malaysia, amounting to RM130.2 million .
It was also due to foreign exchange losses from the re-translation of certain payables and bank borrowings denominated in foreign currencies.
However, the net loss was reduced following the disposal of Corwin, which generated RM508 million in proceeds.
Revenue for the period fell 10.1% to RM8.6 billion from RM9.5 billion in 9MFY16 because of a decline in the automotive and property, asset and construction segments.
In a separate statement, DRB-Hicom said Proton saw rising sales numbers in the final quarter of 2016.
"The carmaker sold 22,199 units in 3QFY16, compared to 14,364 units the previous quarter. The marque had launched a total of four new models in 2016," it said.
Looking forward, DRB-Hicom said despite Proton's improved performance, overall the national automotive sector declined 7% in December 2016 compared to the same month in the previous year.
In 2016, total industry volume fell by 13% year-on-year, its first contraction after six years of growth.
"The automotive industry is however expecting a small growth in sales for 2017 on the back of increased demand via new model launches and an increase in construction projects across the country," it added.
Its search for a foreign strategic partner (FSP) for Proton is expected to be concluded by the first half of 2017.
"The eventual FSP is expected to enable Proton to have access to better and newer technologies apart from enlarging its footprint beyond local shores," it said.
Despite the challenging business environment, DRB-Hicom would continue to strengthen its business operations across the group, aiming at improving operational efficiencies and ultimately achieving better results.
Its stock closed up one sen or 0.71% at RM1.42 for a market capitalisation of RM2.7 billion.
DRBHCOM (1619) - DRB-Hicom turns its earnings around in 3Q on Corwin disposal gain
http://www.theedgemarkets.com/my/article/drb-hicom-turns-its-earnings-around-3q-corwin-disposal-gain
