Cycle-Carriage-Bintang

It has been a great second quarter for the country's biggest Mercedes-Benz dealership, Cycle & Carriage Bintang. It posted a RM21.83 million profit for the quarter ending June 30 (2QFY15), which is about 10 times higher than the RM2.03 million achieved over the same period last year.

Revenue, meanwhile, doubled to RM472.36 million for the quarter under review, from RM 231.16 million last year. Its net profit in the first half of the year catapulted to RM28.47 million or 28.26 sen a share, from RM3.73 million or 3.7 sen a share in the last corresponding period.

Cycle & Carriage chairman Alex Newbigging, said the group's performance was attributed to strong sales of popular models (the brand posted record sales so far this year), improved margins and recognition of the Mercedes-Benz Malaysia Sdn Bhd (MBM) dividend income.

Newbigging says that its Mercedes-Benz operations recorded a net profit of RM17.3 million over the first half of the year, compared to RM3.7 million in 2014, due to a 46% jump in unit sales and better margins. "Overall net profit, which included dividend income received from MBM in June 2015, was RM28.5 million," he added.

The group recently commenced a programme to upgrade existing facilities, while a new Autohaus in Cheras, Kuala Lumpur, is expected to be operational by the end of the year.

In terms of the outlook for the rest of the year, Newbigging believes there will be tougher trading conditions amid model life cycle issues as well, i.e. the ageing E-Class. Cycle & Carriage shares closed on a three-and-a-half-year-high at RM3.46, with a market capitalisation of RM348.58 million.