[Gen-AI Analysis] APM Automotive Holdings Berhad Business Report up until FY ended Dec. 2012 - MarkLines Automotive Information & Gen-AI Platform

APM Automotive Holdings Berhad Business Report up until FY ended Dec. 2012

Business Highlights

Recent Development

Financial Overview

(in million RM)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Overall
Sales	1,198.5	1,182.1	1.4	-
Segment profit	160.7	175.0	(8.2)	-

Business Overview

Suspension Division
-Sales in FY ended Dec. 31, 2012 decreased by 2.9% to RM 226.3 million, due to decrese in the export sales to Eurozone.
-In the last quarter of 2012, a new parabolic spring manufacturing line has been seccessfully commissioned in Port Klang and will be ready for full production in the third quarter, 2013.
-In 2012, a major global truck maker has selected the Company to supply leaf springs for their regional production.

Interior & Plastics Division
-Sales in FY 2012 rose by 6.3%, mainly due to higher production of new vehicles in Malaysia.
-Notwithstanding the increase in revenue, the division's segment profit dropped by 5.3%, because of competitive pricing adjustments.

Electrical & Heat Exchange Division
-Sales in FY 2012 decreased by 3.7% to RM 248.8 million.
-Segment profit for the year decreased by 36.5% year-on-year, mainly due to fluctuation of Japanese Yen in 2012 by more than 10%, resulted to higher imported raw material costs throughout the year.

Operations outside Malaysia
-Sales for FY2012 decreased by 10.6% to RM 123.1 million. The decrease was mainly due to divestment of the loss making radiator operations in Australia in early 2012.
-Segment profit for the year increased significantly by 114.7% to RM 9.3 million.

Joint Ventures

In 2011, the Company and International Automotive Components (IAC) Groupannounced its agreement to form two joint ventures in Malaysia and Thailand. The joint ventures will offer design, engineering and manufacturing for a wide range of vehicle interior components and systems, including instrument panels, door panels, floor consoles, interior trim, flooring and acoustics, overhead systems and package trays, as well as exterior components, such as fascias and rocker panels. (From a press release on November 1, 2011)

APM IAC Automotive Systems Sdn Bhd, Malaysia in which the Company will hold the majority 60% equity interest. This joint venture will be supported by existing APM manufacturing facilities in the region.
IAC APM Automotive Systems Ltd., Thailand in which IAC Group will hold majority 60% equity interest.

R&D

R&D Expenditure

(in million RM)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	3.9	2.5	2.2

R&D Structure

-APM Engineering & Research Sdn Bhd provides engineering design and development services to companies with in the Group.

Technological Alliance

Product	Company
Coil springs	NHK Spring
Leaf springs	Horikiri
Shock absorbers	Hitachi Automotive Systems
Electrical parts	Mitsubishi Electric
Electrical parts	Mikuni
Air-Conditioning system	Valeo
Radiators	Calsonic Kansei
Seats	Tachi-S
Plastic parts	Fuji seat

Investment Activities

Investment outside Malaysia

<Indonesia>
-In 2012, the Company announced that it will establish a new subsidiary, PT. APM Auto Components Indonesia (PT. APMACI). The new manufacturing facility will be located on a land area of approximately 38,077 square meters at Suryacipta Industrial City in Karawang, West Java. The total issued share capital will be 8 million USD, of which 80 percent will be invested by APM Automotive International Ltd. and 20 percent by Auto Parts Holdings Sdn. Bhd. The new company will manufacture and sell automotive heat exchange products, such as air-conditioning cooling system, evaporators, condensers, cooling modules and radiators for the Indonesian market. Completion of the facility is expected at the end of 2012 with operations to commence in the second quarter of 2013. (From a press release on April 17, 2012)

-In 2011, motor vehicles sales in Indonesia are expected to exceed a million units in 2013. In anticipation of this growing automotive market, the Group would be purchasing a 3 hectare land nearby to its existing operations during the current financial year for future potential businesses.

Investment in Malaysia

Suspension Division
-In 2011, the Division invested in a new RM 2.0 million cold coiling production line for the manufacture of coil springs. The new line, to be operational by mid-2012, would improve the product range both in terms of sizes and shapes of the coil springs.