by SHAHEERA AZNAM SHAH / pic by MUHD AMIN NAHARUL
BERMAZ Auto Bhd’s earnings in the first quarter ended July 2020 (1Q21) plummeted 81.7% to RM9.25 million from RM50.52 million made last year due to lower contribution from its domestic operations and losses made by its associated company, Mazda Malaysia Sdn Bhd (MMSB).
The lower contribution from the domestic operations was a result of lower unit sales and gross margin arising from aggressive promotional campaigns to boost sales.
“The negative contribution from MMSB was mainly due to the significant drop in unit sales with minimal orders from both the domestic and export markets during the Movement Control Order (MCO) and Conditional MCO (CMCO) periods,” it said in a statement yesterday.
Revenue for the quarter declined by 16.1% year-on-year to RM448.9 million due mainly to the drop in sales volume from both Malaysia and the Philippine operations during the Covid-19 pandemic.
“During the beginning of the quarter, businesses were still mandated by the respective governments to close for operations.
“Subsequently, the group resumed its operations during the CMCO period in Malaysia and the General Community Quarantine period in the Philippines, but the current trading conditions remain challenging as consumers are cautious in their ‘big-ticket’ spending,” it said.
The sole distributor of Mazda vehicles in Malaysia declared a first interim single-tier dividend of 0.5 sen for the financial year ending April 30, 2021, payable on Nov 18, 2020.
Moving forward, Bermaz Auto facelifted Mazda vehicle models said any launch of the new or will be dependent on market sentiments and the evolving economic conditions as it expects the automotive sector to remain challenging this year.
“Although the sales tax reliefs and aggressive promotional campaigns by the group have produced encouraging results for the Malaysian operations, the group is still cautious of the post-pandemic impacts on the overall Malaysian economy and expects the automotive sector to remain challenging in 2020.
“In line with the government’s efforts to revive the automobile industry, the automobile players in the market have been introducing aggressive promotional campaigns.
“The positive effects of the sales tax reliefs and aggressive promotional campaigns were reflected by the hike in vehicles sales for July 2020, which showed a total of 57,552 units delivered,” it said.