APM Automotive Holdings Berhad Business Report FY ended Dec. 2019
Recent Development
Financial Overview |
(in million MYR) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | Rate of change (%) | Factors | |
| Overall | ||||
| Sales | 1,496.9 | 1,344.4 | 12.2 | 1) |
| Profit before tax | 68.8 | 77.4 | (11.1) | 2) |
| Sales by Division | ||||
| -Suspension | 68.8 | 73.7 | (6.6) | 3) |
| -Interior & Plastics | 935.1 | 749.6 | 24.7 | 4) |
| -Electrical & Heat Exchange | 99.4 | 112.0 | (11.2) | 5) |
Factors
1) Sales
-The Company’s sales in the fiscal year ended December 31, 2019 totaled MYR 1,496.9 million, an increase of 12.2% over the previous year. The increase in sales was due to the increase in demand for OEM parts combined with strong growth in the Interior and Plastics division.
2) Profit before tax
-The Company’s profit before tax decreased by 11.1% to MYR 68.8 million in the fiscal year ended December 31, 2019. Factors contributing to the decreased profit include losses in the Company’s Indonesia operations as well as impairment losses on investment.
3) Suspension Division sales
-External sales of the Company’s Suspension Division decreased by 6.6% in the fiscal year ended December 31, 2019 to MYR 68.8 million. Leaf springs decreased in revenue across both exports and sales in local markets. In addition, a decrease in commercial vehicle production from local OEMs negatively affected sales.
4) Interior & Plastics Division sales
-In the fiscal year ended December 31, 2019, the Interior and Plastics Division increased external sales by 24.7% to MYR 935.1 million. Increased demand in the division resulted from the supply of new locally produced parts and new model launches in the second half of 2019.
5) Electrical & Heat Exchange Division sales
-The Company’s Electrical and Heat Exchange Division had external sales of MYR 99.4 million in the fiscal year ended December 31, 2019, a decrease of 11.2% from the previous year. Lower demand from specific OEM customers, increased competition and launch delays of certain vehicle models all contributed to decreased sales in the division. In addition, certain products produced by the division reached the end of their lifecycle in 2019.
Recent Developments
-In its Suspension Division, the Company aims to expand and enhance its product portfolio with a particular focus on four-wheel drive suspension kits for pickup trucks and SUVs, as demand for those vehicles has steadily grown. In the Interior and Plastics Division, the Company is aiming to expand development of seating systems for other types of vehicles such as buses, coaches, vans and off-road vehicles for other markets outside Malaysia. The Company’s Electrical and Heat Exchange Division will focus on developing aftermarket alternators and starter motors, components for battery thermal management systems, and technology for rapid refrigeration in trucks and containers through the use of unconventional cooling agents.
Awards
-In 2019, the Company won the following awards:
- Delivery Appreciation Award 2018, Best Quality Award 2018 and Supplier of the Year 2018 from Honda Malaysia Sdn. Bhd.
- Zero Defects Continue Award for Mitsubishi from Tachi-S Japan
-In 2018, the Company won the Tachi-S Global QCC Contest Award as well as the Quality and Delivery Appreciation Awards from Honda.
R&D Expenditure |
(in million MYR) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 17.7 | 15.0 | 11.3 |
R&D Facilities
-The Company recently opened a central testing laboratory and is in the process of obtaining third-party accreditation in order to provide validation capabilities for its customers.
R&D Structure
-The Company’s research and development facilities in Port Klang and Oasis Square house 80 engineers.
Technological Alliance
| Product | Company |
| Coil springs | NHK Spring |
| Leaf springs | Horikiri |
| Shock absorbers | Hitachi Automotive Systems |
| Electrical parts | Mitsubishi Electric |
| Mikuni | |
| Air-Conditioning system | Valeo |
| Radiators | Marelli |
| Seats | Tachi-S |
| Plastic parts | Fuji seat |
Capital Expenditure |
(in million MYR) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Total | 31.9 | 43.1 | 93.4 |
-The Company’s capital expenditure in the fiscal year ended December 31, 2019 focused on the purchase of properties in Brisbane, Australia, as well as the upgrade of manufacturing facilities and tooling infrastructure for new vehicle models. The Company invested MYR 18.9 million to enhance its production facilities.
Investments outside Malaysia
<Netherlands>
-A Company joint venture, APM-TS, has opened a new office and storage facility in Enschede, the Netherlands, to meet the growing demand for its products. APM-TS relocated from Oldenzaal to the new facility in Enschede. The expansion reflects the Company’s corporate vision to be a global automotive systems supplier, providing one-stop, tier-one service to OEMs. APM-TS can provide a large range of springs and shock absorbers to the automotive industry in Europe, and also develop new and special products together with the Malaysian development team. APM-TS B.V. is a joint venture between the Company and Bent Holding B.V. of Dutch Managing Director Mark Bent. (From Invest in Holland press release on March 4, 2019)
<Myanmar>
-The Company expects to complete construction of its plant in Myanmar in 2019, with production to begin shortly thereafter.