KUALA LUMPUR (May 25): MBM Resources Bhd (KL:MBMR) struck a cautious tone on its outlook after its first-quarter net profit fell 11%, weighed by weaker performance across all of its operating divisions amid softer automotive industry activity.

Net profit for the three months ended March 31, 2026 came in at RM63.53 million, down from RM71.39 million a year ago, as revenue slipped 5.3% to RM543.72 million from RM574.32 million, according to the group in a bourse filing on Monday. No dividend was declared.

The motor trading and assembly division recorded a revenue of RM480.1 million, down RM20.7 million or 4.1% year-on-year, mainly due to lower stock allocations from Perodua following plant shutdowns during the festive holidays in February and March.

The division’s profit before tax dropped 41.8% or RM4.6 million due to lower sales volume and higher discounting to clear prior-year inventory.

Meanwhile, the auto parts manufacturing division recorded a revenue of RM62.8 million, down 13.7% or RM9.9 million from a year ago, broadly in line with the 10.3% contraction in total industry production during the quarter.

MBM said longer plant shutdowns by several carmakers, coupled with deeper production cutbacks by Honda, had a greater impact on the division’s performance.

As a result, the division’s profit before tax fell RM2.2 million or 41%, partly due to the absence of lump-sum tooling income recognised in the year-ago quarter.

Looking ahead, MBM said the automotive sector is expected to remain challenging this year. It noted that the Malaysia Automotive Association (MAA) has forecast 2026 total industry volume (TIV) at 790,000 units, down 3.8% from the record 820,752 units achieved in 2025.

The group noted that the TIV had already declined 3.5% year-on-year in the first quarter and warned that ongoing geopolitical tensions in West Asia, as well as concerns surrounding petrol and diesel consumption, could continue to weigh on demand.

Still, MBM said resilient labour market conditions and low unemployment are expected to support demand for fuel-efficient and electrified vehicles, particularly national marques and models with battery electric vehicle or hybrid offerings.

“Given the ongoing geopolitical and economic uncertainty, the group foresees a challenging outlook ahead,” it said.

Shares in MBM Resources closed down one sen or 0.2% at RM5.09 on Monday, giving the group a market capitalisation of RM1.99 billion. The stock has declined 10.4% over the past one year.