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MeGroup full-year net profit slides 84.4% to RM1.4m

MALAYSIAN car dealership and automotive parts maker MeGroup posted a fall in net profit of 84.4 per cent in its first full-year results since its Catalist listing in October 2018 -- due in part to listing expenses this year.

Net profit attributable to shareholders was RM1.4 million for the year ended March 31, 2019, down from RM8.9 million the year before. This was despite revenue rising 67.6 per cent to RM243.5 million, and gross profit rising 25.4 per cent to RM24.5 million.

Profit before tax fell 66.1 per cent to RM3.8 million. This was due largely to the absence of a one-time gain of RM4.8 million from the Malaysian government for mass rapid transit compensation due to land acquisition; the absence of a RM0.4 million year-ago gain on the disposal of a subsidiary; and one-off listing expenses of RM3 million in the latest financial year.

Excluding listing expenses, profit before tax would have been about RM6.9 million, down only 6.8 per cent from the year before, noted MeGroup.

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Executive chairman and chief executive officer Wong Cheong Chee said: "We are heartened to see an overall growth of our revenue in FY2019 as well as our dealership business propelling forward. Through more sales in the automobile body and paint repair work services, we expect to see better margins in the near term for our dealership business segment."

Earnings per share were 1.28 sen, compared to 8.77 sen the year before. No dividend was declared.

Although Malaysia's growth is forecast to ease, the government plans to release a new National Automotive Policy in the second quarter of 2019, which might include an emphasis on electric vehicles and a third national car, said MeGroup. This could present opportunities for MeGroup in supplying components for new electric vehicles and the third national car, as well as potential dealership opportunities, said the company.

MeGroup shares closed unchanged at 19.5 Singapore cents on Thursday before the results.