MBMR EYES PERIOD OF STEADY, SUSTAINABLE GROWTH, CONSISTENT RETURNS TO SHAREHOLDERS

MBMR EYES PERIOD OF STEADY, SUSTAINABLE GROWTH,
CONSISTENT RETURNS TO SHAREHOLDERS
Five-year annual average shareholders’ return of 19.1%
dwarfs KLCI’s 9.8%

Subang, June 16, 2015 – MBM Resources Berhad (MBMR) is confident that it is entering into a period of steady and sustainable growth that will see the company delivering consistent returns to shareholders moving forward.

The company’s five-year annual average shareholders’ return of 19.1 per cent far surpasses the Kuala Lumpur Composite Index’s 9.8 per cent¹. 

MBMR’s new investments, which involved significant capital expenditure but were strategically necessary to secure the company’s future, were now ready to take off after a period of gestation in the previous year.

These included capacity expansion of OMI Alloy (M) Sdn Bhd’s alloy wheel manufacturing plant in Rawang, further network expansion to tap into the lucrative vehicle aftersales service market and commencement of distributorship for Iveco commercial vehicles.

For the 12-month period ended December 31, 2014, MBMR recorded revenues of RM1,774.1 million, down 9.5 per cent. Profit before tax was RM132.2 million, down 14.9 per cent from the previous year, mainly due to start-up costs from new investments.

MBMR could take heart that its existing businesses continued to perform well with profit before tax growing by 7 per cent in 2014 to RM183.9 million from RM171.8 million in the previous year.

MBMR group managing director Looi Kok Loon said that the company expected to see meaningful contributions from the new investments from this year onwards. “For example, our decision to add capacity by upgrading existing service centres meant that we were able to tap into the aftersales business, which continues to be highly lucrative recurring income generator. It also helped us diversify our income stream by lessening the dependence on vehicle sales,” he said.

In 2014, MBMR’s 46-branch network recorded an 11 per cent increase in service centre throughput although vehicle sales declined by six per cent.

Mr Looi pointed out that the automotive parts manufacturing division would continue to play a key role in driving MBMR’s growth.

Rising domestic vehicle production and advancing safety standards have benefited MBMR’s subsidiaries such as steel wheel producer Oriental Metal Industries (M) Sdn Bhd and alloy wheel manufacturer, OMI Alloy.

OMI Alloy’s production this year was expected to grow by six fold to an estimated 200,000 units due to rising demand for alloy wheels in the country and new orders from vehicle manufacturers.

Jointly-controlled entity Autoliv Hirotako Sdn Bhd (AHSB), the specialist in safety restraint systems, continued to be the market leader in seatbelts and airbags supply. The company is well-poised to capture growth opportunities from current products and the development of new products to meet higher levels of vehicle safety.

Looi added, “We are proud to welcome yet another top brand to our portfolio.  Iveco, based in Turin, Italy, is a global manufacturer with a wide range of light, medium and heavy commercial vehicles, off-road trucks, and vehicles for special applications. We are confident that Iveco will soon be a major player in the commercial vehicle segment here in Malaysia.” Ends.


^1 2015 Bloomberg Finance L P

***

_{ABOUT MBM RESOURCES BERHAD}

<sub>MBMR is a diverse automotive group that represents some of the biggest international brands in Malaysia. They include commercial vehicle brands Daihatsu, HINO and Iveco; passenger car brands Perodua, Volvo, Volkswagen and Mitsubishi; and sports tuning brands, ABT and HeicoSportiv, and car-care brand Williams.

MBMR is the leader in every market segment it competes in, with products that range from light, medium and heavy duty trucks and buses to entry-level compact cars and luxury vehicles.

MBMR aspires to be one of the leading and most complete automotive groups in Malaysia with a full spectrum of capabilities that include manufacturing and assembly, distribution, retail and dealerships, parts and accessories, body and paint repair and customer services.

For more information on MBM Resources Berhad, please visit www.mbmr.com.my.</sub>