Cycle & Carriage Bintang back in the black in third quarter

PETALING JAYA: Cycle & Carriage Bintang Bhd posted a net profit of RM7.2 million in the third quarter ended Sept 30, compared with a net loss of RM12.24 million a year ago, as government sales tax reduction under Penjana lifted sales in the quarter.

Its revenue jumped 58% to RM409.05 million from RM258.87 million in the same quarter last year.

For the nine months period, its net loss narrowed to RM11.89 million from a net loss of RM16.95 million in the same period in 2019.

The group saw lower volume and margins due to a shift in the sales mix to lower priced models and weak consumer demand, which was exacerbated by the implementation of a movement control order and other Covid-19 related restrictions, resulting in a further reduction in unit sales and after-sales volumes, by 9% and 13% respectively, compared with 2019.

Passenger car sales saw some improvement in the third quarter with the announcement of a sales tax reduction by the government. The group also improved its performance by implementing cost-saving initiatives which led to a lower net loss for the period.

Its revenue fell 11.4% to RM764.3 million from RM862.54 million in the same period last year.

Chairman Eric Chan said in the first nine months of 2020, the group experienced challenging trading conditions as a result of softening demand and pressure on margins in the premium luxury segment of the automotive industry.

“The implementation of Covid-19-related restrictions led to a significant reduction in unit sales, after-sales volumes and earnings. Despite the subdued economic environment, the group remains committed to its business improvement strategy.

“The automotive market is expected to remain challenging for the rest of the year despite improved passenger car sales in the third quarter as a result of a new government sales tax reduction scheme to stimulate demand. The group remains committed to its business improvement strategy,“ he said.