Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation

Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Wednesday, September 15, 2010

DRB Hicom upbeat on financial results

Automotive based group DRB Hicom Bhd is confident of surpassing last year's operating profit of RM457 million in the current financial year ending March 2011.

It said the projection was based on the positive performance in the first quarter ended June 30, 2010 and the much-improved results of its subsidiaries and its continuing group-wide efforts to improve.

Group managing director Datuk Seri Mohd Khamil Jamil said the pre-tax profit for the first quarter ended June 30, 2010, was a 157 per cent jump at RM223.475 million compared with RM86.988 million in the same quarter of 2009.

DRB Hicom also recorded its highest ever operating profit of RM457 million for the financial year ended March 31, 2010 while profit before tax was at RM657 million.

"We are trying to rationalise between automotive and other businesses because automotive is a very volatile business and the margins are very low," he told reporters after its 20th Annual General Meeting in Shah Alam today.

Despite the difficult operating environment, the group managed to grow its businesses especially in the services sector with a 3.5 per cent increase in revenue to RM6.31 billion from RM6.1 billion in the previous financial year.

Meanwhile, Mohd Khamil said the company was also looking at new joint ventures with another automotive company in Asia and hoped to finalise it soon.

"We are now negotiating with the company and we have done a lot of feasibility studies and costing," he said, adding that some details were being looked into now.

On the possibility of Proton acquisition, he said for now the company was focusing on Volkswagen and UK-based POTENZA Sports Cars Ltd to develop its automotive sector.

"Proton is being very well managed by its current management under Datuk Syed Zainal," he said.

"Whether we acquire Proton or not we will always work together as we are one of the main vendors and suppliers to Proton parts and components, and a retailer," he added.

On Bank Muamalat disposal, the company has written in to Bank Negara to ask for an extension on the period for the divestment of its 30 per cent interest in Bank Muamalat.

Would be potential acquirers of the equity have been slowed down by the economic slowdown, he said, adding that the bank was looking at a strategic partner who can also bring their management, products and technical expertise.--Bernama

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