Latest Quarterly Results

Condensed Consolidated Statements Of Profit Or Loss And Other Comprehensive Income
For The Quarter Ended 30 September 2024 - unaudited

The above condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to these interim financial statements.

Condensed Consolidated Statements Of Financial Position
As At 30 September 2024 - unaudited

*Net assets per share is calculated based on total share capital in issue less treasury shares of 6,105,700.

The above condensed consolidated statement of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to these interim financial statements.

Operating Segments Review

Statement of Financial Position

The Group's financial standing remained robust with shareholders' fund of RM1.4 billion and a net cash position of RM312.7 million as at 30 September 2024 (i.e. cash and cash equivalents plus other investments (current assets) and less bank borrowings). The Group's current ratio (i.e. Current Ratio = Current Assets/Current Liabilities) improved from 2.47 times to 2.77 times mainly due to the increase in cash and cash equivalents following the IMTN issuance.

The net assets per share of the Group recorded a slight reduction from RM7.31 as of 31 December 2023 to RM7.22 as of 30 September 2024, mainly due to dividend payout to shareholders amounting to RM21.5 million in the previous quarter and the unfavourable effects of foreign currency translation for the Group's foreign subsidiaries and joint ventures. The Malaysian Ringgit had strengthened significantly against a host of currencies as at the end of the current quarter under review. Notwithstanding the above, the Group recorded a higher profit attributable to owners of the Company in the current financial period of RM48.6 million which mitigated the factors explained above.

Statement of Cash Flow and Capital Expenditure

For the current quarter ended 30 September 2024, the Group recorded a net increase in cash and cash equivalents of RM18.3 million from RM478.7 million as of 31 December 2023 to RM497.0 million as of 30 September 2024. The positive cash flow movement was attributed to the following factors:-

1. Net cash generated from operating activities of RM56.8 million that was mainly driven by pre-tax profit of RM98.9 million and offset by unfavourable changes in working capital mainly due to down payments made to suppliers, whereby the goods were shipped out after the end of the current reporting period, and higher trade and other receivables balance in line with the higher revenue recorded during the quarter under review.
2. Net cash used in investing activities of RM178.1 million was mainly for the investments in unit trust of RM130.0 million, the acquisition of a land in Indonesia amounting to RM24.1 million, the purchase of tooling, machineries and equipment amounting to RM24.6 million and the Group's investment in an associate in Malaysia amounting to RM4.6 million, offset by dividend received from a joint venture amounting to RM5.7 million; and
3. Net cash generated from financing activities of RM152.7 million mainly due to the issuance of RM200.0 million of IMTN during the previous quarter, offset by the payment of the second interim dividend for the financial year ended 31 December 2023 totalling RM21.5 million and payment of dividend to non-controlling interests amounting to RM24.0 million.

As of 30 September 2024, the Group's capital commitment stood at RM14.6 million comprising primarily the Group's investment in tooling, machineries/equipment and development costs for the supply of parts for new vehicle models and the upgrading of production facilities. The capital commitment is funded internally and through bank borrowings.

The Group recognizes that the retention of sufficient cash reserves is essential in the pursuit of growth and expansion. Thus, the Group's liquidity remains intact as the balance of Islamic Medium-Term Notes of up to RM1.25 billion in nominal value, as of the date of this report, can be utilized for future capital investment, if and when required.

Analysis of Performance of All Operating Segments

Q3'2024 vs. Q3'2023

For the current quarter ended 30 September 2024, the Group recorded revenue of RM545.2 million, an increase of 5.2% compared with revenue of RM518.4 million in the corresponding quarter ended 30 September 2023. The higher revenue in Q3'2024 was largely driven by the OEM segment, following the commencement of supply for certain new models launched in Malaysia since Q2'2024, coupled with the growth in export sales due to improved market conditions.

However, the Group's profit before tax ("PBT") reduced from RM42.4 million in the corresponding quarter ended 30 September 2023 to RM38.1 million in the current quarter ended 30 September 2024 mainly due to unrealized foreign exchange losses which arose from trade receivables balance denominated in foreign currencies, following the strengthening of Malaysian Ringgit in the current quarter ended 30 September 2024 as explained above.

Year-to-date 2024 ("YTD 2024") vs Year-to-date 2023 ("YTD 2023")

For the nine months ended 30 September 2024, the Group recorded higher revenue of RM1.49 billion, which represents an increase of RM33.3 million or 2.3% compared with revenue of RM1.46 billion in the same period of last year. The improved performance was mainly due to the same reasons explained above.

In line with higher revenue, the Group's PBT increased to RM98.9 million (YTD 2023: RM73.7 million) due to favourable sales mix; upward price adjustment received from certain customers; lower cost of production due to decrease in certain raw material and energy prices; and higher share of profits from the Group's equity accounted associates and joint ventures.

Suspension Division

For the current quarter ended 30 September 2024, the Suspension Division recorded a 5.6% decrease in revenue (Q3'2024: RM59.7 million; Q3'2023: RM63.3 million) mainly due to the softening of local REM market, mitigated by increased sales in export segment. In line with the lower revenue, coupled with unfavourable sales mix and foreign exchange losses, the Suspension division registered a lower PBT of RM0.1 million compared to PBT of RM0.9 million in the corresponding quarter of last year.

For the nine months ended 30 September 2024, the Suspension Division recorded revenue of RM178.2 million (-0.8% compared to the same period last year (‘YoY")) and registered a PBT of RM3.8 million compared to a loss before tax ("LBT") of RM0.7 million in the corresponding period. The improved performance despite a flat revenue, was mainly attributable to higher margins from export sales and lower production costs due to the decrease in raw material and energy prices.

Interior & Plastics Division

For the current quarter ended 30 September 2024, the Interior & Plastics Division recorded an increase in revenue by 5.2% (Q3'2024: RM437.8 million; Q3'2023: RM416.2 million) mainly due to the commencement of supply for new OEM models since Q2'2024. In line with higher revenue, the PBT improved by 15.3% (Q3'2024: RM50.9 million; Q3'2023: RM44.1 million), and further contributed by favourable sales mix and lower cost of production which resulted from the decrease in certain raw material prices and improved operational efficiency.

For the nine months ended 30 September 2024, the Interior & Plastics Division recorded higher revenue of RM1.16 billion (+1.9%) as against RM1.14 billion recorded in the same period last year. PBT increased by 42.4% to RM118.0 million due to the same reasons explained in the paragraph above, including upward price adjustment received from certain customers and the recovery of development expenditures incurred for certain models.

Electrical & Heat Exchange Division

For the current quarter ended 30 September 2024, the Electrical & Heat Exchange Division registered a decrease in revenue by 4.8% (Q3'2024: RM33.8 million; Q3'2023: RM35.5 million) mainly due to a slowdown in call-ins from certain OEM customers. Despite the lower revenue, LBT of the Division decreased to RM0.8 million compared to LBT of RM1.0 million in the corresponding quarter of last year mainly due to upward price adjustment received from certain customers and foreign exchange gains arising from purchases of imported components.

For the nine months ended 30 September 2024, the Division recorded higher revenue of RM106.5 million (+5.3% YoY) due to higher call-ins from OEM customers. In line with the higher revenue and further contribution by upward price revisions received from certain customers and foreign exchange gains as explained above, the Division posted a lower LBT of RM1.3 million compared to LBT of RM4.1 million in the same period last year.

Marketing Division

For the current quarter ended 30 September 2024, the Marketing Division recorded an increase in revenue by 6.3% (Q3'2024: RM71.7 million; Q3'2023: RM67.5 million) mainly due to strong export sales to North America, Australia and Thailand, offset by a slowdown in demand from domestic REM customers. Despite recording higher revenue, the Marketing Division registered LBT of RM6.9 million compared to PBT of RM1.8 million in the corresponding quarter of last year, due to unrealised forex exchange losses which arose from trade receivables balance denominated in foreign currencies.

For the nine months ended 30 September 2024, the Marketing Division recorded revenue of RM210.8 million (+1.4% YoY) and LBT of RM4.2 million compared to PBT of RM8.4 million in the same period last year due to the same reasons explained in the paragraph above.

Non-Reportable Segment, Malaysia

This segment comprises mainly operations relating to revenue received from sources that include the rental of properties in Malaysia, provision of management services, and engineering and research services for companies within the Group. Revenue generated from these services and sources form part of the intersegment elimination for the total Group's results (as depicted in Note A9). This segment also comprises the Group's investment and participation in associate.

For the current quarter ended 30 September 2024, this segment's revenue increased by 4.3% to RM12.4 million from RM11.9 million in Q3'2023, mainly due to higher inter-group billing of services. Despite the higher revenue, LBT for the segment widened to RM4.9 million compared to LBT RM1.6 million in the corresponding quarter of last year. The higher LBT was mainly due to higher finance cost following the issuance of RM200 million IMTN in Q2'2024.

For the nine months ended 30 September 2024, this segment's revenue increased by 4.5% to RM36.7 million from RM35.1 million in 2023, mainly due to higher inter-group billing of services. Despite the higher revenue, LBT for the segment widened to RM12.0 million compared to LBT RM5.6 million in the same period last year due to the same reason explained in the paragraph above, coupled with impairment charge for certain research and development expenditures.

Indonesia Operations

Indonesia Operations refer to the manufacturing and supply of suspension products such as coil springs, shock absorbers and leaf springs as well as the Group's investment and participation in joint ventures and associate in Indonesia.

For the current quarter ended 30 September 2024, the Indonesia Operations recorded revenue of RM22.3 million, a decrease of 15.9% compared to RM26.5 million in the same quarter last year. The decrease in revenue was mainly due to a slowdown in domestic REM market, impacted by the country's sluggish economic growth.

Despite the decrease in revenue, the Indonesia Operations recorded higher PBT of RM2.1 million compared to PBT of RM1.2 million in the corresponding quarter of last year. The improved performance was contributed by higher gross margins arising from favourable sales mix and lower material costs. In addition, the Indonesia Operations recorded a write-back in provision for doubtful debts following settlement with certain customer.

For the nine months ended 30 September 2024, Indonesia operations recorded revenue of RM64.8 million (-3.9% YoY), dragged by a slowdown in the REM market for commercial vehicles, albeit mitigated by higher export sales. Despite the lower revenue, PBT for Indonesia operations came in at RM2.2 million compared to LBT of RM1.7 million in the same period last year mainly due to the same reasons explained in the paragraph above, and further boosted by the higher share of profit from the Group's joint ventures.

All Other Segments

This business segment refers to the Group's operations in Thailand, Vietnam, Australia, the United States of America ("USA"), the Netherlands and Myanmar ("Operations Outside Malaysia").

For the current quarter ended 30 September 2024, Operations Outside of Malaysia recorded revenue of RM40.6 million (+3.9% compared to the same period last year), mainly due to the improved market conditions for bus and train seats in Australia operations. Despite the higher revenue, this segment recorded a flat LBT of RM2.5 million mainly due to the escalating operating cost in Australia.

For the nine months ended 30 September 2024, this Segment recorded a decrease in revenue to RM120.3 million (-2.8% YoY) mainly due to the slowdown in Vietnam automotive industry which affected the OEM demand for both commercial and passenger vehicles. In line with the lower revenue, coupled with the escalating operating cost in Australia operations and provision made for slow moving inventories in certain operations, this segment registered higher LBT of RM8.9 million compared to LBT of RM4.4 million in the previous corresponding period.

Commentary On Prospects and Targets, Strategies and Risk

APM is principally involved in the design, manufacturing, assembly and production of automotive and mobility components. The Group's main operations are located in Malaysia, but it is also present in various other jurisdictions, including the United States of America (U.S.), the Netherlands, Australia, Thailand, Vietnam, the Republic of Indonesia and the United Kingdom.

The total industry volume ("TIV") in Malaysia recorded 594,037 vehicles sold in the first nine months of 2024. This represents a 3.9% increase compared to the same period in 2023. The encouraging TIV was primarily due to the strong showing by the national car makers, supported by the resilient domestic economy, stable interest rate and new model launches. Based on the trajectory, the TIV for 2024 is expected to achieve the revised forecast of 765,000 units set by the Malaysian Automotive Association ("MAA").

The Group's domestic REM segment is experiencing a slowdown in demand which is exacerbated by stiff competition from imported goods/products. Separately, the Group's export segment continues to show a strong performance due to improved market conditions, following the subdued demand in 2023. However, the risk of currency fluctuation (i.e. Ringgit strengthening) could impact the competitiveness and profitability of the Group's export segment. Additionally, the ongoing tension in the Middle East remains a risk to supply chain stability, which, if escalated, could further derail the revenue and margins of the Group's export segment.

Elsewhere, the automotive industry in neighboring countries within ASEAN is also experiencing a slowdown, especially in Vietnam, Indonesia and Thailand where the Group operates. The markets had been in decline after an initial rebound from the Covid pandemic, further compounded by sluggish economic growth and inflationary pressure which is dampening consumer demand for large purchases.

Geopolitical tensions remain high and further escalation may result in renewed financial market stress and major disruptions to the global economy. Against this backdrop, the Group will continue to exercise prudence and caution in its approach towards business considering the prevailing uncertainties surrounding its operating environment. Looking ahead, the Group will continue to focus on its 5-year strategic plan for business sustainability, while creating value for shareholders.