SHAH ALAM: BOLSTERED by projections of modest increase in vehicle volumes from automotive customers Perodua, Honda and Mazda for this year, EP Manufacturing Bhd (EPMB) is working to sustain profitability after a difficult 2016.
The automotive systems and components manufacturer posted a net profit of RM276,000 in the first quarter ended March 31, compared with a net loss of RM3.03 million in the same quarter a year ago.
Revenue increased 27.9 per cent to RM122.93 million in the quarter from RM96.08 million previously due to higher sales.
“Last year was difficult for us and the Malaysian automotive industry as the total industry volume (TIV) shrank by 13 per cent, or 86,550 units.
“As a result, we have to balance the significant drop in volume with fixed overheads and impairment costs,” said executive chairman Hamidon Abdullah.
His optimism is based on the Malaysian Automotive Association’s TIV projection of 590,000 units for this year, or 1.7 per cent growth from last year.
“We will be seeing the roll-out of several new vehicle models in the market this year, which will spur uptrends in sales.
“Industry experts have also reported an increased number of hire purchase loan applications in the past quarter.
“These are indications that demand for new vehicles could see a gradual upward trend and we are well poised to meet our customers’ production demand.
He said while the company still faced uncertainties over Proton’s stake takeover by Zheijiang Geely Automotive Co Ltd, EPMB hoped that the deal would bring benefit to the company.
Proton is one of its four key customers, contributing about 20 per cent to EPMB’s total earnings.