by FARA AISYAH/ pic by TMR

THE share prices of MBM Resources Bhd surged to a six-year high ahead of the company posting a 114.3% year-on-year (YoY) jump in earnings for its second quarter ended June 30, 2019 (2Q19).

MBM closed 30 sen or 8.9% higher to RM3.67 yesterday, valuing the company at RM1.44 billion.

The automotive group posted a net profit of RM74.04 million in 2Q19 against a net profit of RM34.55 million in 2Q18, due to better performance from all its business segments.

In an exchange filing yesterday, the company noted its motor trading segment recorded a 45% YoY increase of its profit before tax (PBT) to RM9.44 million, while the auto parts manufacturing segment posted a 152.23% YoY PBT growth to RM3.96 million.

In addition, MBM Resources recognised a RM24.76 million gain on the disposal of a 22% shareholding in its associates Hino Motors Sales (M) Sdn Bhd and Hino Motors Manufacturing (M) Sdn Bhd in the three months.

Its quarterly revenue increased 15.42% YoY to RM558.05 million from RM483.48 million in 2Q18.

As such, the group’s earnings per share for the quarter jumped to 18.94 sen, from 8.83 sen last year.

MBM Resources also declared a first interim dividend of six sen to be paid on Sept 19, 2019.

The company said Perusahaan Otomobil Kedua Sdn Bhd (Perodua) was the main revenue growth driver for the motor trading segment.

“Demand for Perodua vehicles remained strong in this quarter, especially with the Myvi, Axia and Aruz models. Volume for Volvo also increased further with improved supplies of the XC40,” it said.

Revenue from its auto parts manufacturing segment improved on the back of higher production demand.

For the alloy wheel plant under the segment’s discontinued operation, the loss before tax was RM5 million, lower than the corresponding quarter due to reduced operating costs compared to last year, and partially offset by closure and related costs.

For the first half ended June 30, 2019 (1H19), MBM Resources posted a 83.63% YoY jump in profit to RM123.69 million.Revenue was also up 14.89% YoY to RM1.08 billion.

“The global market and economic environment for 2H19 are expected to be challenging, which will have an impact on the local economy,” MBM Resources noted.

“Notwithstanding, the group remains on track with its plans and is optimistic with its performance, given the strong customer demand for the brands within the group,” it added.