DRB-Hicom’s ops affected by pandemic lockdowns

This resulted in the group posting a net loss of RM179.4m for 3Q21


DRB-HICOM Bhd stated that the lockdown instituted by the government to contained the Covid-19 impacted its operations in the third quarter (3Q), resulting in the group posting a net loss of RM179.44 million for 3Q ended Sept 30, 2021 (3Q21).

The group had made a net profit of RM47.49 million in 3Q20. Revenue for the 3Q fell 40.5% to RM2.12 billion from RM3.56 billion in 3Q20.

In a statement yesterday, DRB-Hicom noted that revenue for July and August was significantly affected by the lockdown and restriction of business activities under Phase 1 and 2 of the National Recovery Plan.

It added that business operations resumed after the reopening of economic activities as announced by the government in mid-August 2021.

On a segmental basis, revenue for the automotive sector declined to RM1.27 billion in 3Q21 as sales activity ceased under the Movement Control Order.

Services sector revenue fell 9% to RM835.21 million in 3Q21, led by falling revenue at Pos Malaysia Bhd.

Its properties segment’s revenue plunged 88% to 12.84 million in 3Q21 with the various construction projects at different stages of completion.

The group, however, is optimistic of the quarter ahead and expects the automotive business to remain as the key contributor to the group.

DRB-Hicom noted that the government’s decision to extend the sales tax exemption for passenger vehicles until June 30, 2022, will induce strong demand for cars.

“With operations running at full capacity governed by strict standard operating procedures, Proton Holdings Bhd and other marques within the group are committed to ramping up production and accelerating delivery, alongside various promotion programmes to spur sales growth.

“With the resumption of economic activity, national carmaker Proton delivered 10,380 units in September compared to 2,741 units in August and 1,904 units in July during the lockdown,” the group statement read.

DRB-Hicom further added that both the Proton X50 and X70 models continue to garner strong demand and become leaders in their respective segments with overall 27,312 units sold year-to-date (YTD), which accounts for 37.4% of Proton’s overall YTD sales.

The group added that the Saga too has continued its leadership of the A-segment sedan market and remains the best-selling Proton model.

“Additionally, the lifting of the interstate travel ban and gradual reopening of borders is expected to boost the group’s other businesses in the logistics, defence, aerospace, banking and services segments.

“However, as economic uncertainties may still persist, the group will continue to remain vigilant and cautious in managing its businesses,” it said.

DRB-Hicom does not expect the economic recovery in the 4Q to reverse the cumulative negative impact brought about by the Covid-19 pandemic for the financial period ended Sept 30, 2021.

For the cumulative nine months ended Sept 30, 2021 (9M21), DRB-Hicom made a net loss RM413.89 million which is narrower to the net loss of RM431.86 million it bore in 9M20.

Revenue for the 9M21 period dipped 0.6% year-on-year to RM8.25 billion.

Shares of DRB-Hicom closed unchanged at RM1.66 yesterday, valuing the group at RM3.21 billion.