Latest Quarterly Results

Condensed Consolidated Statements Of Profit Or Loss And Other Comprehensive Income
For The Quarter Ended 31 March 2017 - unaudited

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 2016 and the accompanying explanatory notes attached to these interim financial statements.

Condensed Consolidated Statements Of Financial Position
As At 31 March 2017 - unaudited

The above condensed consolidated statements of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2016 and the accompanying explanatory notes attached to these interim financial statements

Operating Segments Review

Analysis of Performance of All Operating Segments

1Q17 vs. 1Q16

The Group recorded revenue of RM294.1 million for the current quarter, an increase of 6.5% compared to 1Q16 of RM276.1 million, largely due to higher off take from OEMs thanks to the new models launched in the second half of 2016.

Group’s profit before tax came in at RM18.5 million as compared with RM13.6 million in the corresponding quarter of last year due to higher sales and lower foreign currency translation losses arising from the trade debtors/creditors and bank balances.

Segmentation Review

Suspension Division

The Suspension Division’s revenue declined by 23.0% to RM39.9 million in the current quarter compared to RM51.8 million in 1Q16 mainly caused by lower off-take from OEM as certain models had reached end of model life cycle in the second half of 2016. The profit before tax on the other hand, increased to RM4.9 million for 1Q17, compared to 1Q16 of RM3.4 million. The increase was mainly due to reversal of provision for warranty and lower foreign currency translation losses arising from the trade debtors/creditors and bank balances.

Interior & Plastics Division

Revenue for Interior and Plastics Division registered an increase of 12.3% to RM196.1 million in 1Q17 on the back of higher demand for OEM parts, arising from new model launches and higher localization content for certain OEM parts in the second half of 2016.

Correspondingly, profit before tax increased by 45.1% to RM10.3 million compared to RM7.1 million a year ago in line with the higher revenue. The higher profit before tax was also because reversal of staff related cost provision in the first quarter of 2017.

Electrical & Heat Exchange Division

Compared to corresponding same quarter last year, Electrical & Heat Exchange division revenue decreased by 11.2% to RM37.5 million. This was mainly due to lower demand from OEM customers. Likewise, the bottom-line registered a drop of 84.6% to RM0.6 million compared to RM3.9 million in the same quarter last year. The reduction in the profit before tax was in tandem with the lower demand from OEM markets while production overheads remained relatively fixed despite a reduction in production volume. The 1Q16’s profit included reversal of product related costs provision during that period.

Marketing Division

The strong USD against Ringgit Malaysia continues to benefit marketing export division. The export sale grew by 18.6% compared to 1Q16. The local REM also saw an increase of revenue by 28.5%, thanks to the aggressive promotional campaign and launch of new products during the quarter under review. Overall, the Marketing division recorded revenue of RM57.7 million for the current quarter 2017, an increase of 21.9% compared to RM47.3 million for the corresponding quarter in previous year. The segment’s profit before tax had increased to RM2.9 million from RM1.2 million in the same quarter last year. This is mainly due to higher sales, favourable products mix as certain products have higher margins and lower foreign currency translation losses arising from the trade debtors/creditors and bank balances.

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 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 of 2017, the segment revenue increased by 15.2% to RM15.9 million from RM13.8 million in the corresponding quarter last year. The increase was mainly to due to revenue contribution from the acquisition of aluminum casting business on September 2016.

In line with the increase in revenue, this segment recorded profit before tax of RM0.1 million compared to a loss of RM2.2 million in the previous year.

Indonesia Operations

Our 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.

The Indonesia Operations posted higher revenue of RM12.2 million for the current quarter of 2017, an increase of 93.7% from RM6.3 million recorded in the corresponding quarter last year. The growth in top line was mainly contributed by higher off-take from OEMs and sale of leaf spring upon commencement of its production in June 2016.

However, the Indonesia Operation’s loss has widened by 75.0% to RM2.1 million compared to loss of RM1.2 million in the same quarter last year. The higher loss was caused by lower foreign currency translation gain arising from the trade debtors/creditors and bank balances.

All Other Segments

This business segment refers to our operations in Thailand, Vietnam, Australia, the United State of American, Netherlands and Myanmar (“Operations Outside Malaysia”).

Operations Outside Malaysia continues to register revenue growth with increase of 20.9% for its first quarter of 2017 at RM30.1 million compared to RM24.9 million recorded in corresponding quarter last year. The revenue from the coach’s seat business in Australia constituted 54% of the segments revenue. The recognition of sales from the newly acquired locomotive coach seat in Australia also contributed to this higher revenue. The acquisition was completed on 9 March 2016.

Likewise, profit before tax has improved by 25.0% to RM2.0 million from RM1.6 million in the same quarter last year.

Commentary On Prospects and Targets

The Group continues to face a challenging operating environment in the highly competitive domestic automotive industry as margins remains under pressure from lower volumes and higher costs.

The Group, which has a strong emphasis on technology for sustainable growth would continue to drive the growth by developing higher quality products and expand product range locally and regionally.