PETALING JAYA: Despite the challenging operating environment, Bermaz Auto Bhd (BAuto) is optimistic about its prospects for the financial year (FY) ending April 30,2021.
The automotive distributor’s executive chairman Datuk Seri Ben Yeoh said the group remains cautious but confident that it would be able to sustain its total sales volume in the current year.
“The group will continue to consolidate its dealership network to further strengthen its brand position, while simultaneously continuing to seize timely opportunities to further expand its sales dealership network in order to increase its geographical coverage as well as sales volume for both new and pre-owned cars, ” Yeoh said.
“With an already established sales and service network, the group will explore new range of products from non-conflicting manufacturers to further grow its sales revenue base, ” he noted in the company’s latest annual report.
As in previous years, Yeoh said the group would remain focused on the sales of the Mazda completely knocked down (CKD) vehicles so as to compete effectively in the market with more affordable pricing.
“The group continues to be in a strong position to exert influence on its associated companies namely, Mazda Malaysia Sdn Bhd and Inokom Corp Sdn Bhd, in the production of Mazda vehicles to cater for the demand of Mazda CKD models, ” he said.
Yeoh also noted incentives under the Penjana stimulus package augured well for the automobile industry in Malaysia, and this, in turn, would help improve BAuto’s sales revenue and income.
The Penjana stimulus package announced in June 2020 included a 100% sales tax exemption on CKD models and 50% sales tax exemption on completely built-up (CBU) models from June 15 to Dec 31 this year.
These initiatives were given to help jump-start the automobile industry, which had been impacted by lockdown measures to contain the spread of Covid-19 in the country.
In addition, Bank Negara in July 2020 had cut its overnight policy rate to a record low of 1.75%.
This resulted in lower hire purchase interest rate to boost consumer spending. This was expected to have a positive impact on the growth of the total industry volume, Yeoh said.
As for the group’s operations in Philippines, Yeoh said, Bermaz Auto Philippines Inc (BAP) would preserve its revenue through introduction of refreshed models and continued strengthening of its brand equity and dealer supports.
In light of the challenges arising from the Covid-19 pandemic, the World Bank projected the Philippines economy would contract 1.9% in 2020 before returning to a growth of 6.2% next year.
BAuto saw its net profit fall 62% to RM100.5mil in FY20 from RM264mil in FY19, with its earnings per share falling to 8.65 sen from 22.75 sen previously.
The group’s revenue fell 30% to RM1.76bil in FY20 from RM2.52bil in the preceding year.
The decline in earnings and revenue was due to lower sales volume from both the domestic and Philippine operations.
BAuto’s shares closed unchanged last Friday at RM1.36. Year-to-date, the counter has lost about 35% in value.
