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BAuto earnings hit by car price war
KUALA LUMPUR, March 9, 2015:
Despite posting higher earnings in the third quarter ended Jan 31, 2015, Berjaya Auto Bhd (BAuto) today said it had been affected by an intense price war among local vendors towards the end of last year.
In its Bursa filing, BAuto said fewer consumers buying cars towards end of 2014 had also affected sales of certain popular models.
“The third quarter has been a challenging period for the group with many local distributors offering heavy discounts at a scale never seen before due to overstocking of inventory.
“The group has no such issue as our supply of CKD vehicles was disrupted by Inokom’s paint shop upgrading work in October and part of November 2014.
“The intense competition is expected to continue until the oversupply situation ceases and the effects of Goods and Services Tax (effective April 1) on car prices become clearer to consumers.”
Compared to the second quarter, BAuto said its pretax profit decreased by RM14.8 million or 18.3%. But its RM66.17 million pretax profit was 52% higher than the RM43.5 million in the previous corresponding quarter.
Revenue for the quarter of RM388.76 million was higher than the RM343.03 million before.
Cumulatively, the nine-month pretax profit of RM223.67 million was higher than the RM117.17 million before, while revenue rose to RM1.4 billion, up from RM1.05 billion previously.
The higher earnings were attributed to better sales volume of the Mazda2 and CX-5 models. A third interim dividend of 3.35 sen has been declared.
