DRBHCOM ... Jul10

DRB-HICOM Berhad ‘s Revenue surged to a 10-year high at RM6.31billion

In its audited results for the financial year ended 31st March 2010, DRB-HICOM Berhad achieved a 10-year high in Group revenue at RM6.31billion, an increase from RM6.1 billion posted in the last financial year. The pre-tax profit, which included exceptional gains, was RM657.9 million for the financial year under review, compared to RM774.9 million in the previous year.

Excluding the one-off exceptional gains from the disposal of estates amounting to RM211.4 million for the financial year ended 31st March 2010 and investment in EON Capital Berhad for RM567.5 million in the previous year; the Group achieved an operational profits of RM446.5 million for the year under review, a 115 per cent jump from RM207.4 million registered last year.

As at 31st March 2010, the Group’s total assets stood at RM26 billion compared to RM21.5 billion as at 31st March 2009, net assets per share was at RM 2.37, while basic earnings per share was at 24.43 sen. Its gearing ratio was lower at 0.33 times.

“This is indeed an accomplishment for the Group. Our businesses are mainly consumer-based and we achieved these outstanding results notwithstanding the rather subdued economy which dampened consumer spending.

“It is also very much a testament to the fundamentals that have seen the Group grow from strength to strength,” said DRB-HICOM Berhad’s Group Managing Director Dato’ Sri Haji Mohd Khamil Jamil.
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He said this achievement was also due to the Group’s foresight in preparing for the repercussions of the economic downturn as early as the 2007 US subprime crisis. The Group also implemented strategies which included prudent cost management coupled with a Group-wide emphasis on innovation, to increase revenue streams.

Fifty seven percent or RM3.6 billion of the Group’s revenue was contributed by the Group’s automotive core business – which has always been the main revenue contributor.

In the financial year ended 31st March 2010, the Group’s automotive business countered the effects of the economic slowdown by adopting strategies which included prudent cost and inventories management. To retain customer loyalty, the Group began enhancing its customer relationship management, focusing particularly on after sales and delivery services.

The Group also has companies in its stable that bucked the trend. They include Honda Malaysia Sdn Bhd whose market share increased from 5.8 per cent in 2008 to 7.2 per cent in 2009, while Mitsubishi Motors Malaysia Sdn Bhd, Automotive Corporation (Malaysia) Sdn Bhd, and Suzuki Malaysia Automobile Sdn. Bhd. recorded sales increase of 16 per cent, 16.5 per cent and 13 per cent respectively. The Group’s luxury car marque Audi, distributed by Euromobil Sdn Bhd saw its market share in the luxury segment increase from 2 per cent to 5 per cent.

“This year we have numerous exciting projects that would take our automotive business to a completely new level and up the value chain. This includes an alliance with UK-based POTENZA Sports Car Ltd which will see the possibility of the Group developing and manufacturing sports car for the local and regional market.

“We are also negotiating with the owners of prime marques on the possibility of assembling their vehicles at our Automotive Complex in Pekan. Currently, we assemble the Mercedes-Benz, Isuzu D-Max, Hicom Perkasa and Suzuki Swift 1.5.

To further uplift the whole value chain of the auto industry, the Group has in April this year, set up what would eventually be the country’s largest educational institution on automotive –the International College of Automotive or ICAM.
“ICAM is a three pronged initiative to ensure the supply of skilled and knowledgeable automotive professionals, to complement the nation’s effort in turning Pekan into a regional automotive knowledge hub and drive the national auto industry forward,” said Dato’ Sri Haji Mohd Khamil.
The Group’s Services core business which earned RM2.6 billion for the year under review, accounting for about 41 per cent of its revenue, is the fastest growing sector. DRB-HICOM Bhd’s diversified sector comprises concession businesses such as solid waste management, vehicle inspection, airport services and power plant operation and management, as well as financial services and trading companies.

With greater emphasis on efficiency and quality service, the services sector has picked up significantly in the last three years, providing added stability and growth to the Group.

Bank Muamalat Malaysia Bhd, the 70 per cent owned Islamic bank of the Group, showed tremendous growth - with number of branches growing by 37 per cent from 41 to 56. Upon its acquisition in October 2008, the Group has implemented numerous measures to give the bank a competitive edge.

These included the introduction of products and services like e-debit, i-muamalat and BeesSTAR-I children’s account

“Our target now is to ensure that the bank becomes one of the top five Islamic banks in the country within the next 24 months,” said Dato’ Sri Haji Mohd Khamil Jamil.

The Group’s concession companies – Rangkai Positif Sdn Bhd, Alam Flora Sdn Bhd, Puspakom Sdn Bhd and KL Airport Services Sdn Bhd also showed improvement in profit and performance.

“Now with ICAM in our fold, our Services core business has been expanded to include education. We are constantly on the lookout for new businesses to further expand our Services sector.”

The Board has proposed a final dividend of 2.5 sen gross per share less taxation for Financial Year 2009/10, in addition to the interim dividend of 1.5 sen gross per share amounting to RM21.75 million paid on 29 March 2010.