Greetings, fellow Malaysian investors! Today, we’re unboxing the latest financial report from Bermaz Auto Berhad (BAuto), a prominent player in Malaysia’s automotive sector. Their unaudited quarterly (Q4) interim financial report for the year ended 30 April 2025 has just dropped, and it offers a candid look at the company’s performance amidst evolving market dynamics.

The headline? BAuto faced significant headwinds, reporting a noticeable decline in both revenue and profit for the quarter and the full financial year. However, it’s not all grim news, as the company continues to execute strategic initiatives and has announced a dividend for its shareholders. Let’s delve into the details to understand what’s driving these numbers and what lies ahead for BAuto.

Core Data Highlights: A Closer Look at Performance

Quarterly Performance: Q4 FY2025 vs. Q4 FY2024

The fourth quarter, ending 30 April 2025, saw a substantial dip in performance when compared to the same period last year. This quarter’s figures reflect the intensifying competition and shifting market preferences.

The Group’s revenue plummeted by 43.6%, a significant RM408.9 million drop. This was primarily attributed to a decline in sales volume from its Mazda and Kia domestic operations. The report highlights the continuous influx of competitively priced Chinese-made vehicles into the Malaysian market as a key factor impacting sales. Consequently, Profit Before Tax (PBT) saw an even steeper decline of 73.5% (RM95.9 million). It’s worth noting that the preceding year’s corresponding quarter included gains from the closure of BAuto’s Peugeot operation in March 2024, which inflated that period’s profit figures.

Full-Year Performance: FY2025 vs. FY2024

The full financial year ended 30 April 2025 tells a similar story of market challenges affecting overall performance.

For the entire financial year, Group revenue decreased by 32.9% (RM1.29 billion), again largely due to lower sales volumes from its Mazda and Kia domestic operations. PBT fell by 53.6% (RM259.4 million), reflecting the reduced profit contribution from these key segments.

Quarter-on-Quarter Performance: Q4 FY2025 vs. Q3 FY2025

Comparing the current quarter to the immediate preceding quarter (Q3 FY2025) provides insights into recent trends.

Revenue declined by 12.2% quarter-on-quarter, again due to lower sales volumes in domestic Mazda and Kia operations. However, despite this revenue drop, the Group’s PBT saw only a marginal decline of 0.6%. This resilience was mainly due to a higher profit contribution from its Mazda Philippines operation and a reversal of provisions no longer required for its Malaysian operations.

Financial Health: Balance Sheet & Cash Flow

As of 30 April 2025, BAuto’s financial position shows some notable shifts:

Total assets and equity have decreased, reflecting the challenging operating environment. However, total liabilities also saw a slight reduction. The Basic Net Assets Per Share decreased from 69.87 sen to 55.50 sen.

From a cash flow perspective, the Group generated RM226.1 million from operating activities for the full year, a healthy increase from RM202.2 million in the previous year. Investing activities turned positive, generating RM69.7 million compared to a net outflow of RM15.0 million last year, largely due to higher dividends received. Financing activities saw a net cash outflow of RM224.5 million, primarily due to significant dividend payments to shareholders and non-controlling interests, as well as treasury share acquisitions. Overall, the closing cash and cash equivalents stood at a robust RM432.8 million, up from RM364.8 million a year ago.

Risks and Prospects: Navigating the Road Ahead

BAuto acknowledges that the road ahead is fraught with challenges. The Malaysian economy, while growing, faces uncertainties from escalating trade tensions and evolving trade tariffs. The Total Industry Volume (TIV) in Malaysia has seen a decline, impacted by short working months and the continuous influx of Chinese marque vehicles, which are aggressively priced.

In the Philippines, BAuto’s operations benefit from a positive economic outlook with an expected GDP growth rate of around 6.0% in the coming quarters. However, the broader automotive sector is still expected to register lower growth due to factors like inflationary pressures, weaker global growth from geopolitical conflicts, and the ongoing impact of trade tariffs.

BAuto’s strategy to counter these headwinds includes the launching of new and/or facelift models for its existing marques (Mazda, Kia) and the introduction of new vehicle marques like Xpeng and Deepal. The company recently announced that its 85% owned subsidiary, Bermaz Changan Sdn Bhd, was awarded the distributorship of Deepal electric vehicles in Malaysia, signaling a move into the burgeoning EV market. Additionally, BAuto’s investment in EP Manufacturing Bhd (EPM) could pave the way for future collaborations in the local automotive ecosystem.

Shareholder Returns: Dividends Declared

Despite the challenging financial year, BAuto continues its commitment to shareholder returns. The Board has approved and declared a fourth interim dividend of 1.50 sen single-tier dividend per share for the financial year ended 30 April 2025, payable on 5 August 2025. This brings the total dividend declared for FY2025 to 16.75 sen single-tier dividend per share.

While this is lower than the 26.00 sen total dividend declared for the previous financial year (FY2024), it demonstrates the company’s intent to maintain shareholder distributions even during tougher times.