Strong auto sector boosts DRB-Hicom profit

Rising automobile demand enables the group to record a 28% YoY rise in revenue in 1Q21

by TMR / Pic by TMR FILE PIX

DRB-HICOM Bhd saw its pre-tax profit rise to RM 36.3 million in the first three-month period ended March 31, 2021 (1Q21), compared to a loss of RM185.3 million in the corresponding period in 2020.

The group said rising automobile demand, augmented by better performance of operating subsidiary companies, and higher share resulted from joint ventures and associated companies enabled it to record a 28% year-on-year (YoY) rise in revenue in the quarter.

In the period, the group’s revenue rose to RM3.51 billion, from RM2.74 billion in the corresponding period a year ago.

As previously, the automotive sector once again outperformed other sectors within the group.

The sales tax holiday for passenger vehicle purchases that was extended to June 2021 enabled DRB-Hicom’s automotive brands to net a revenue worth RM2.58 billion in 1Q21 compared to RM1.81 billion in the same quarter last year.

Brands under the DRB-Hicom umbrella, including Proton, Honda, Mitsubishi, Volkswagen and Isuzu fared better sales in March 2021 versus February 2021.

According to Malaysian Automotive Association (MAA) data, national carmaker Proton Holdings Bhd sold 32,420 units in 1Q, keeping its second place in the national sales charts.

Honda retained its top non-national brand status with 14,771 units sold in the quarter.

For the services sector, revenue was higher at RM863.7 million than RM830.5 million in 1Q20.

The result was once again boosted by the performance of postal and logistics, and banking subsidiaries.

However, the group’s property sector saw its revenue fall to RM69.7 million compared to RM 93.3 million in 1Q20 due to lower billings and lower full swing construction projects.

This is also DRB-Hicom’s first quarter after its formal exit from the hospitality subsector.

Moving forward, the firm said its automotive sector remains the core business of the group.

“With the continuation of sales tax exemption for passenger vehicles until June 2021, the MAA has projected a total industry volume of 570,000 units in 2021.

“This is expected to boost demand and drive automotive sales further,” DRB-Hicom said.

As seen from 1Q sales, Proton began the year with strong sales momentum with sales volume of 15,017 units in April 2021, the best monthly sales figure since 2013.

This upward momentum was contributed by top selling models namely Proton Saga, followed by the two SUVs, Proton X70 and the newer Proton X50.

DRB-Hicom’s other businesses in the defence, aerospace, banking, services and property segments are currently operating in a competitive and challenging environment.

“Under these unprecedented times, emphasis on business resiliency and prudent cost management are vital in navigating businesses amid the ongoing headwinds from the Covid-19 pandemic,” it said.

The company remains cautious on the challenging operational environment for the current financial year ending Dec 31, 2021, due to the emergence of Covid-19 new variants and the total lockdown period beginning today. — TMR