Profit statements

DRB-Hicom closes FY21 in the red as Q4 profit drops 88% in the absence of windfall gains

KUALA LUMPUR (February 24): DRB-Hicom Bhd closed its financial year ended December 31, 2021 (FY21) in the red, after recording an 88% drop in net profit in the fourth quarter to RM117.47 million against RM985.99 million in the same quarter a year ago.

The drop in quarterly profit was due to the fact that the conglomerate’s financial performance in the corresponding quarter of the previous year benefited from exceptional gains of RM945.95 million from the disposal of real estate assets and investments. The decline in 4QFY21 earnings also came as quarterly revenue fell 15% to RM4.12 billion from RM4.85 billion, its stock exchange filing showed.

For the whole of FY21, the group recorded a net loss of RM296.42m compared to a net profit of RM554.13m in FY20, as revenue declined fell 5.9% to RM12.38 billion from RM13.16 billion due to lower contributions. almost all of its business segments, with the exception of automotive and services.

The conglomerate said its automotive segment recorded higher revenues of RM8.2 billion from PROTON, automotive distribution companies as well as manufacturing and engineering. Its services segment, meanwhile, accounted for RM701.96 million in revenue from cargo transportation, automotive logistics services and higher cargo tonnage from its logistics and aviation businesses.

But its real estate segment saw an 85.2% drop in revenue to RM241.24 million, while revenue from its aerospace and defense segment fell 29.3% to RM620.44 million. of RM, followed by a decline in postal services (down 12.8% to RM1.5 billion) and banking. (down 2.6% to RM1.12 billion) segments.

DRB-Hicom said it would not announce a FY21 dividend payment until after its audited financial statements were finalized in April.

Regarding the outlook, DRB-Hicom expects FY22 to continue to be challenging given the uncertainties in domestic and global markets.

That said, he sees his automotive sector as a growth driver and pointed out that PROTON ended 2021 on a high, selling 114,708 cars – the most since 2014 – while improving its market share to 21.9% from 20. .5%.

“The positive momentum should continue with the extension of the sales tax exemption for passenger vehicles until June 30, 2022. New model launches and promotions from other brands in the group will fuel a further increase segment revenue,” DRB-Hicom said. .

Meanwhile, DRB-Hicom expects its aerospace and defense businesses to ramp up production and be flexible to meet customer demand, while its postal segment’s turnaround plan, focused on profitability and customer-centric strategy, should improve its overall performance.

Other businesses in the banking, service and real estate sectors will continue to operate efficiently by optimizing cost management and improving business productivity, DRB-Hicom added.

DRB-Hicom shares closed unchanged at RM1.48 on Thursday, valuing the group at RM2.86 billion.