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Quarterly Report For The Financial Period Ended 31 March 2018

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Condensed Consolidated Statements Of Profit Or Loss And Other Comprehensive Income
For The Quarter Ended 31 March 2018 - unaudited

Income Statement Ended 31 March 2017

The above condensed consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2017 and the accompanying explanatory notes attached to these interim financial statements.

Condensed Consolidated Statements Of Financial Position
As At 31 March 2018 - unaudited

Balance Sheet Ended 31 March 2017

The above condensed consolidated statements of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2017 and the accompanying explanatory notes attached to these interim financial statements.

Operating Segments Review

Statement of Financial Position

The Group's financial stability was reflected in net assets per share which slightly increased to RM6.30 (2017: RM6.29).

Total assets had decreased by 1.5% to RM1,620.4 million, mainly due to depreciation for the quarter and higher consumption of inventory as higher inventories were kept in Q4 2017 due to expected rise in material price and higher sales for Q1 2018.

In line with the higher consumption, lower purchases were made in Q1 2018 which resulted in the lower trade and other payables. These had resulted in total liabilities decreasing by 8.0% to RM332.2 million. The decrease was also contributed by the repayment of the borrowings.

Capital Expenditure and Cash Flow Position

Despite the higher profitability, cash and cash equivalents had decreased by 7.3% to RM233.9 million from RM252.4 million. This was mainly due to no new drawdown of loan was made, absence of NCI subscribing shares in subsidiaries and repayment of matured loan.

Looking ahead, the Group's strong cash and cash equivalents provide flexibility in pursuit of growth and expansion. This is further strengthened with the availability of the Islamic Commercial Papers ("ICPs") Programme and Islamic Medium Term Notes ("IMTNs") of up to RM1.5 billion in nominal value which will be used to fund the capital investment.

Analysis of Performance of All Operating Segments
1Q18 vs. 1Q17

The Group's recorded revenue of RM320.3 million in the current quarter, representing an increase of 8.9% compared to 1Q 2017 of RM294.1 million. The Interior and Plastics Division registered a higher demand for certain OEM models.

Likewise, Group's profit before tax increased by 55.9% to RM28.8 million compared to previous year same quarter of RM18.5 million. The higher profit was mainly attributed to the better utilization of fixed overhead which led to an improve gross profit margin for the Group.

Segment Review
Suspension Division

The Suspension Division saw an increase in revenue by 42.1% to RM56.7 million in 1Q18 against RM39.9 million in 1Q17. The revenue growth was due to higher export sales for leaf spring products. Despite the increase in revenue, profit before tax for quarter under review had reduced to RM4.1 million from RM4.9 million a year ago. The decrease resulted from weaker US Dollar against MYR as most export sales were traded in USD. Moreover, the rise in raw material price mainly steel bar and natural gas had impacted the margin.

Interior & Plastics Division

The revenue for Interior and Plastics Division had increased by 11.1% from RM196.1 million in 1Q17 to RM217.9 million in the current quarter. The increase is mainly due to higher demand by OEM customers and an introduction of new model since second half of 2017. Profit before tax had increased by 63.6% to RM16.8 million which is in-line with the increase in revenue, coupled with favorable products mix that generated higher margin.

Electrical & Heat Exchange Division

The Electrical & Heat Exchange Division saw a decrease in revenue by 10.1% to RM33.8 million. End of Production of two major models by OEM's customers was the key reason for the decrease. However, profit before tax had increased as the division had improved its operation efficiency including cost control. Besides, positive price adjustment by one of the customers had contributed to the better profitability.

Marketing Division

Revenue for marketing division grew by 15.7% or RM9.0 million quarter on quarter to RM66.7 million in 1Q18 driven by higher export sales of leaf spring products to Europe. Local replacement markets sales also improved as it's had expanded its product range by including new models. The increase in profit before tax is in tandem with the increase in revenue and a favourable products mix.

Non-reportable segment, Malaysia

This segment comprises mainly operations relating to the rental of properties in Malaysia, provision of management services, and engineering and research services for companies within the Group. The revenue from these services formed part of inter-segment elimination for the total Group's results (as depicted in Note A9). In addition, this segment also comprises the business of casting, machining and assembly of aluminum parts and components and distribution of motor vehicle to internal and external customers.

For the current quarter, the non-reportable segment, Malaysia's revenue slightly increased by 1.7% to RM16.1 million. Despite the increase, the segment had a loss before tax of RM0.5 million mainly due to higher administrative costs.

Indonesia Operations

Indonesia Operations refers to the manufacture of suspension products such as coil spring and leaf spring and the Group's investment in joint venture and associate in Indonesia

Revenue for Indonesia operations had increased by 21.1% to RM14.7 million from RM12.2 million in 1Q17, as compared to 1Q18. The increase was contributed by the sales of leaf spring. The division had narrowed the loss before tax due to the higher sales of leaf spring and better performance by both the associate and joint venture of the Group.

All Other Segments

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

The revenue for Operations outside Malaysia had decreased by 3.5% for the 1Q18 to RM29.0 million from RM30.0 million recorded in the corresponding quarter last year. The reduction in revenue was mainly due to lower sales from Australia operations resulting from the unfavourable exchange rate.

Profit before tax had decreased by 42.1% or RM0.8 million mainly due to the higher material price and labour cost experienced by the leaf spring plant in Vietnam.

Commentary On Prospects and Targets, Strategies and Risk

APM is primarily engaged in the design, manufacturing and supply of automotive parts with a reach that extends not only throughout Malaysia but internationally as well. Currently, APM has active presence in the United States of America, Netherlands, Australia, Thailand, Vietnam and the Republic of Indonesia.

APM's performance depends on regulatory, cultural and economic stability of these territories. APM is aware of these risk factors and accepts that many of them may not be within its control.

However, APM believes that prudent planning with organizational foresight and product innovation can minimize the risks and facilitate sustainable growth.

APM organically developed a 5-year transformation plan as a counter measure to assist it in maintaining sustainable growth. This plan, which focusses on priority areas such as expansion, efficiency and cost effective operations, was launched in 2015.

To-date, the transformation has seen the development and launch of APM's Test Lab which is equipped with the latest state of the art equipment for product testing and measurements and APM's participation in projects that involve the use and application of efficient alternative renewable energy.

The efforts and projects undertaken by APM following the commencement of its transformation plan is coming to fruition and with Moody upgrading its global auto industry from negative to stable (Source: https://www.cnbc.com/2018/03/14/moodys-upgrades-auto-industry-outlook-to-stable-fromnegative.html) and the anticipated growth of the automotive industry on all fronts in 2018 by The Malaysian International Trade and Industry (MITI) (source: www.miti.gov.my/miti/.../Media_Release), greater growth can be expected from APM.

In addition to the above, APM will continue to strive for greater success expeditiously through mergers, acquisitions, strategic partnerships, joint ventures and alliances.