KUALA LUMPUR (April 23): Cycle & Carriage Bintang Bhd (CCB) has returned to the black with a net profit of RM3.39 million in the first quarter ended March 31, 2021 (1QFY21) from a net loss of RM9.63 million a year ago due to higher vehicle unit sales, lower operating expenses and financing costs.
As a result, the Mercedes-Benz car dealer’s earnings per share rose to 3.37 sen compared to losses per share of 9.63 sen, according to its Bursa Malaysia filing.
Meanwhile, the group’s quarterly revenue increased by 36% to RM292.83 million from RM215.91 million, supported by the continued sales tax reduction which subsequently saw an increase in vehicle unit sales.
On a quarterly basis, its results have also improved from the fourth quarter ended Dec 31, 2020 (4QFY20) when it posted a net loss of RM1.11 million.
Commenting on the group’s financial result, CCB chairman Eric Chan said whilst the group benefited from the improved trading conditions in the first quarter, the automotive market is expected to remain challenging for the rest of the year, despite the extension of sales tax reduction until end June 2021.
“Supply related challenges affecting the production of automotive makers and general sluggish demand exacerbated by the impact of the Covid-19 pandemic will continue to affect the group’s operating environment.
“The group will continue its cost-saving initiatives and remain committed to its business improvement strategy,” Chan said.
Chan also highlighted the group will continue to monitor its debt levels and liquidity positions, with steps taken to reduce both operational and financial risks.
“A range of actions has been carried out to manage costs and preserve cash,” he added.
Last month, the group’s largest shareholder Jardine Cycle & Carriage Ltd had made a second bid to privatise the company, with an offer of RM2.40 per share.
Its earlier bid in Nov 2019 to buy out minority shareholders via a selective capital reduction and repayment exercise for RM2.20 per share fell through after some shareholders voted against the capital reduction.
Shares of CCB ended one sen or 0.41% lower to RM2.40, valuing the company at RM241.79 million.
