KUALA LUMPUR (Aug 18): DRB-Hicom Bhd (KL:DRBHCOM) saw its second-quarter net profit drop by nearly half even as revenue increased, no thanks to a higher tax bill and higher operating cost.

Net profit for the three months ended June 30, 2026 (2QFY2026) fell 47.4% to RM30.56 million from RM58.09 million a year earlier, according to the diversified group's filing with Bursa Malaysia on Tuesday.

The group booked a tax expense of RM26.56 million compared with a RM4.49 million tax credit in the same quarter last year. DRB-Hicom said the tax charge arose mainly from profit-making subsidiaries and expenses that were not deductible for income tax purposes.

Finance costs also rose 8.9% to RM137.25 million from RM126.07 million, while other expenses increased to RM34 million from RM19.56 million, the group noted.

Quarterly revenue, however, surged 33% year-on-year to RM5.50 billion from RM4.14 billion, largely driven by higher sales across the group's mobility, banking, postal and services businesses. This was partly offset by weaker performances from the properties business.  

That stronger topline translated into higher operating earnings that led to the group's profit from operations rising to RM222.19 million from RM205.63 million, while pre-tax profit increased 20.2% to RM148.12 million from RM123.19 million.

Overall, the group's mobility division was the biggest contributor to the quarterly revenue growth. This was helped by higher Proton vehicle sales, a stronger contribution from the group's enlarged aerospace operations following the acquisition of CTRM AeroSystems Sdn Bhd in December 2025, and improved performance from its automotive distribution business.  

Properties was the only segment to record a sharp decline, with revenue plunging 89% to RM10.4 million from RM94.28 million in 2QFY2025 due to lower revenue recognition from property development and construction projects.  

The group did not declare any dividend during the quarter.

Looking ahead, DRB-Hicom said it expects a "moderate outlook" for FY2026 amid resilient domestic conditions but continued uncertainty surrounding the global economy, including the Middle East conflict.  

The group expects Proton to continue building on stronger sales and the growing adoption of its electrified vehicles, while Pos Malaysia is expected to continue its turnaround programme.

For the first half of FY2026, DRB-Hicom's revenue rose 24.4% year-on-year to RM10.26 billion from RM8.25 billion while net profit remained flat at RM75.56 million versus RM75.82 million.

Shares of DRB-Hicom closed 1.5 sen or 1.5% lower at 97 sen on Tuesday, valuing the group at RM1.87 billion. The counter has fallen 7.6% year to date.