APM Automotive Holdings Berhad Business Report FY ended Dec. 2017
|(in million MYR)|
|FY ended Dec. 31, 2017||FY ended Dec. 31, 2016||Rate of change (%)||Factors|
|Profit before tax||71.4||83.2||(14.2)|
|Sales by Division|
|-Interior & Plastics||627.4||650.1||(3.5)||3)|
|-Electrical & Heat Exchange||121.8||151.6||(19.7)||4)|
-The Company’s sales in the fiscal year ended December 31, 2017 totaled MYR 1,188.5 million, an decrease of 3.9% over the previous year. The decrease in sales came from the massive slowdown in the local automotive industry following the continued weakening of Ringgit against the US dollar, softened domestic demand for motor vehicles and more stringent hire purchase approval.New vehicle production in Malaysia suffered a 8% drop whereby the Total Production Volume ("TPV") of new vehicles fell from 545,253 units in 2016 to 499,639 units in 2017 and this impacted the Group's revenue from OEM's segment.
2) Suspension Division sales
-Sales of the Company’s Suspension Division decreased by 21.5% in the fiscal year ended December 31, 2017 to MYR 67.2 million. The Division saw a reduction in revenue as many of its local OEM shock absorbers reached the end of product life cycle in second half of 2016. The revenue reduction was however mitigated by the growth in export revenue for the leaf spring products.
3) Interior & Plastics Division sales
-In the fiscal year ended December 31, 2017, the Interior and Plastics Division decreased by 3.5% to MYR 627.4 million. The decrease in sales caused by lower demand for OEM parts and end of product life cycle for certain vehicle models during the year.
4) Electrical & Heat Exchange Division sales
-The Electrical and Heat Exchange Division showed of MYR 121.8 million in the fiscal year ended December 31, 2017, a decrease of 19.7% from the previous year. The decrease was caused by lower off-take from OEM customers and the production phase out for certain car models during the third quarter of 2016 and in the second half of the year.
-On 19 January 2017, the Group subscribed for 49% equity interest in APM TACHI-S Seating Systems Vietnam Co., Ltd. at a total cash consideration of RM5,430,000. The company develops, manufactures, assembles and sells automotive seats in Vietnam. The subscription of APM TACHI-S Seating Systems Vietnam Co., Ltd. has no material impact to the Group.
-The Company announced that its Auto Parts Holdings (APH) subsidiary completed the acquisition of 40% of the total issued and paid-up share capital of APM IAC Automotive Systems (APM IAC) held by IACG Holdings (IAC) on May 31, 2016. Consequential to the above, APM IAC has now become a wholly owned subsidiary of the Company. APM IAC was incorporated on November 25, 2011 as a joint venture when APH and IAC entered into a joint venture agreement on November 1, 2011 for the purpose of joint participation in the manufacture and sale of automotive interior plastic components and systems to the domestic and international OEMs in Malaysia. This acquisition gives the Company a stronger competitive advantage as the Company would be able to offer complete interior solutions to both local and overseas OEMs and customers. (From a press release on May 30, 2016)
-In December 28, 2016, the Company acquired a 52% stake in Omnimatics Sdn. Bhd., a company that has developed an IoT telematics platform connecting vehicles to the cloud. The acquisition will enable the Company to explore new opportunities combining IoT technologies with its components.
-In August 2014, the Company announced that APM Auto Components (Australia) Pty Ltd has completed the acquisition from McConnell Seats Australia Pty Ltd of its public sector mass transit seating manufacturing business known as "McConnell Seats Australia" including all goodwill and assets associated with the business for cash considerations of AUD 4.7 million (approximately USD 4.4 million). APM Auto Components (Australia) is a wholly owned subsidiary of Auto Parts Holdings Sdn Bhd which in turn is a wholly owned subsidiary of APM. McConnell Australia designs and manufactures seats for bus and rail markets in Australia. (From a press release on August 4, 2014)
-The Company announced that its wholly owned subsidiary, Auto Parts Holdings Sdn Bhd (APH) entered into a joint venture agreement with Delta Kogyo Co., Ltd, to carry on the business of developing, manufacturing, assembling and sale of automotive seats. The joint venture will supply seats to Mazda Motor Corporation for the Mazda CX-5 and to other automakers. A new joint venture will be incorporated in Malaysia under the proposed name APM Delta Seating Systems Sdn Bhd. APH will own 60% of the joint venture while Delta owns the 40%. (From a press release on October 28, 2016)
-The Company announced that its wholly owned subsidiary, APM Automotive IndoChina Ltd (AAIL), entered into a joint venture agreement with Tachi-S (Thailand) Co., Ltd, a wholly owned subsidiary of Tachi-S Co. Ltd. The joint venture will develop, manufacture, assemble and sell automotive seats in Vietnam for original equipment manufacturers and other manufacturers. The new joint venture company will be incorporated in Vietnam under the proposed name APM Tachi-S Seating Systems Vietnam Co., Ltd. with an investment capital and charter capital of USD 2.5 million. The new company will be owned 49% by AAIL and 51% by Tachi-S. (From a press release on August 12, 2016)
-The Company has announced that its wholly owned subsidiary, APM Auto Components Europe B.V. (AACE), has established a joint venture company with Bent Holding B.V. in the Netherlands. The new company, APM-TS B.V., was incorporated to carry out the business of development of springs, absorbers and coilovers for the automotive markets. As part of its establishment, APM-TS B.V. will acquire certain assets and business of TS-Automotive B.V. AACE owns 80% in the new company, while Bent Holding owns 20%. (From a press release on November 13, 2015)
-In January 2013, the Company announced that the Company and Tachi-S Co., Ltd. will establish a new company "APM Tachi-S Seating Systems" in Selangor, Malaysia through a joint investment. The company will produce automotive seats for 40,000 vehicles a year, starting in the second half of 2014. The seats will be supplied to the plants of Japanese automakers. Production operations will be initially outsourced to Auto Parts Holdings, to which Tachi-S is licensing-out technologies. APM Tachi-S Seating Systems will be capitalized at MYR 3.5 million, of which 60% will be provided by Auto Parts Holdings and 40% by Tachi-S Thailand Co., Ltd. The capital composition is planned to be adjusted when the factory is completed. Sales are expected to reach JPY 3.2 billion by the fiscal year ended December 31, 2015.
-HR Asia Best Companies To Work for in Asia 2017
-The BrandLaureate Best Brands Awards 2016/2017
Most Sustainable Brand
-PROTON Suppliers Award 2017 Quality Award Rank A
-Outstanding Quality Performance 2017
-Superior Quality & Delivery Award 2016/2017
-Continuous Rank-A Performance 2017
-Quality Environment Management System
-Perodua Excellent Safety President Award (PESPA) 2017
|(in million MYR)|
|FY ended Dec. 31, 2017||FY ended Dec. 31, 2016||FY ended Dec. 31, 2015|
-APM Engineering & Research Sdn Bhd, which provides engineering design and development services to companies with in the Group, moved to Oasis Square, Ara Damansara in Selangor, Malaysia in 2014.
|Coil springs||NHK Spring|
|Shock absorbers||Hitachi Automotive Systems|
|Electrical parts||Mitsubishi Electric|
|Plastic parts||Fuji seat|
|(in million MYR)|
|FY ended Dec. 31, 2017||FY ended Dec. 31, 2016||FY ended Dec. 31, 2015|
Investments in Malaysia
-During the fiscal year ended December 31, 2015, the Company was in the process of constructing a manufacturing plant in Kulim, Malaysia, for its Interior & Plastics Division. Operations are expected to begin at the plant by the end of 2016.
Investments outside Malaysia
-In 2016, the Company completed construction of a new manufacturing plant in Thailand, which is expected to be fully operational in the first quarter of 2017.
-In 2014, the Company is building a plastic and components plant in Rayong, Thailand.
-In December 2013, the Company announced that it has established the new company, APM Auto Components (Thailand) Ltd. (AACT). APM Automotive International Ltd., APM Automotive IndoChina Ltd. and APM Automotive Thailand Ltd. subscribed for the new company's shares . APM Automotive Thailand holds 14,999,995 shares of the total 15,000,000 shares of AACT, which is capitalized at THB 112.5 million (approximately USD 3.5 million). The new company will be principally involved in the manufacturing of automotive plastic parts and components and carrying out the business of importing and exporting automotive parts and components.
-In 2013, the Company's leaf spring manufacturing plant saw significant improvements in operational efficiencies. Over 49% of the products manufactured at the plant are exported.
-In 2016, the Company begun operations of a leaf spring manufacturing line and shock absorber manufacturing line in Indonesia. The Company has also begun the start-up of a second coil spring production line.
-In December 2014, the Company announced that the Ministry of Law and Human Rights of the Republic of Indonesia has approved the deed of establishment of the Company's two wholly owned subsidiaries. P.T. APM Leaf Springs Indonesia, which is capitalized at USD 15 million, will manufacture and sell leaf springs. Meanwhile, P.T. APM Shock Absorbers Indonesia, which is capitalized at USD 5 million, will manufacture and sell shock absorbers. Both subsidiaries are 75% owned by P.T. APM Automotive Indonesia and 25% owned by P.T. APM Auto Components Indonesia. (From a press release on December 8, 2014)
-In 2014, the second plant in Karawang, Indonesia, commenced construction, and will be ready for the production of leaf springs by the end of 2015.
-In 2013, PT APM Armada Suspension commenced supply of coil springs to a local car makers. The plant was able to improve operational efficiencies.
-In October 2013, the Company announced that it has received a Permit from Myanmar Investment Commission (MIC) to approve an investment proposal by APM Automotive Myanmar Ltd. and APM Automotive Indochina Ltd. for manufacturing and marketing automotive parts and modules in the industrial area of Bago Region, Myanmar. The new company's name is "APM Auto Components Myanmar Co., Ltd. (APM Myanmar)". The new company will have an authorized capital of USD 10 million. Construction of the plant will commence within one year from the date of the MIC Permit and is expected to be completed in three years. The initial outlay of APM Group for the construction of manufacturing plant, purchase of machinery and equipment for the first three years is estimated at USD 9 million.