SINGAPORE (May 30): MeGroup reported a 84.4% drop in full-year earnings to RM1.4 million ($0.46 million) from RM8.9 million a year ago.
The weaker bottomline was largely due to the absence of a one-time gain of RM4.8 million received in FY18 from the Malaysian government for the Mass Rapid Transit (MRT) system compensation due to land acquisition; the absence of the gain on disposal of Yatta Group amounting to some RM0.4 million in FY18 and; the one-off listing expenses of RM3.0 million that was recognised in FY19.
Full-year revenue increased 67.7% to RM243.5 million from a year ago.
On a segmental level, revenue from the group’s dealership business increased 93.4% to RM207.3 million in FY19 mostly due to four months of contribution from the newly opened dealerships Honda dealership in Kuala Selangor and the Peugeot dealership in Setia Alam, and an increase in vehicle sales at the Honda dealership in Cheras for the full financial year.
Revenue from the group’s manufacturing business decreased by RM1.9 million to RM36.2 million in FY19 because of a decrease in the volume of NVH (noise, vibration and harshness) components supplied to the auto industry.
The group’s FY19 gross profit margin was 10.1% compared to 13.5% in FY18. This decrease was mainly due to the decrease in gross profit margin of 4.2 percentage points from the manufacturing business.
In its outlook statement, the group says it is currently upgrading its machinery and equipment to increase productivity. This upgrading will be done in phases and is likely be completed by 2020.
The group also intends to increase its stake in subsidiary MJN Motors Sdn Bhd that owns and operates the Honda dealerships from 55% to 80%.
The Malaysian government has plans to unveil its new National Automotive Policy (NAP) in the second quarter of 2019 with an emphasis on electric vehicles and new technologies, as well as a potential third national car for Malaysia. This could present opportunities to the group in terms of the production and supply NVH components.
Shares in MeGroup last traded at 20 cents on May 23.
