MBM---LOSSES OF RM242.5 MILLION....................
KUALA LUMPUR (Feb 23): Shares in MBM Resources Bhd fell as much as 7.4% in morning trade today, after the group turned in net losses for the first time since it was listed over twenty years ago.
At 11.45am, the counter was down nine sen or 3.9% to RM2.20, after some 374,700 shares crossed, bringing its market capitalisation to RM859.95 million.
MBM Resources reported its quarterly loss yesterday, hurt by impairment adjustments totalling RM242.5 million, which included goodwill and joint venture investment in its subsidiary Hirotako Holdings Bhd, as well as for property, plant and equipment at its alloy wheel plant.
In its bourse filing, the automotive group said this resulted in a net loss of RM191.74 million in the fourth quarter ended Dec 31, 2017 (4QFY17), compared to a net profit of RM7.57 million in the corresponding quarter in the prior year.
Quarterly revenue, however, rose by a marginal 1.5% to RM443.77 million from RM437.23 million in 4QFY16.
The poor quarterly performance resulted in the group posting its first net loss of RM148.83 million for the full FY17 compared to a net profit of RM66.07 million the previous year. Revenue, however, increased 3.7% to RM1.73 billion from RM1.67 billion in FY16.
This resulted in a loss per share of 49.05 sen in 4QFY17 compared to earnings per share of 1.94 sen in 4QFY16. Nevertheless, the group still declared a second interim dividend of 1.5 sen
However, analysts remain upbeat as excluding the large one-offs, MBM Resources' underlying earnings are seen to be picking up steam.
"The decision to take a huge impairment on assets at the alloy wheel plant was a surprise. But this could also mean lower depreciation cost going forward, and possible acceleration in turnaround of the units," said MIDF Research in a note today.