APM Automotive Holdings Berhad Business Report FY ended Dec. 2018

Recent Development

Financial Overview

(in million MYR)

	FY ended Dec. 31, 2018	FY ended Dec. 31, 2017	Rate of change (%)	Factors
Overall
Sales	1,344.4	1,188.5	12.3	1)
Profit before tax	77.4	71.4	8.4	2)
Sales by Division
-Suspension	73.7	67.2	9.7	3)
-Interior & Plastics	749.6	627.4	19.5	4)
-Electrical & Heat Exchange	112.0	121.8	(8.0)	5)

Factors
1) Sales
-The Company’s sales in the fiscal year ended December 31, 2018 totaled MYR 1,344.4 million, an increase of 12.3% over the previous year. The increase in sales was due to the increase in demand for OEM parts, especially due to new model launches in the second half of the year, as well as increased vehicle sales due to Malaysia’s initiative to remove the Goods and Services Tax from June to August 2018.

2) Profit before tax
-The Company’s profit before tax increased by 8.4% to MYR 77.4 million in the fiscal year ended December 31, 2018. Factors contributing to the increased profit include increased demand from OEMs and a favorable product mix in the Interior and Plastics Division with increased profit margins.

3) Suspension Division sales
-External sales of the Company’s Suspension Division increased by 9.7% in the fiscal year ended December 31, 2018 to MYR 73.7 million. Increased exports of leaf springs to Europe, North America and the ASEAN regions combined with increased local demand for shock absorbers contributed to the increased sales.

4) Interior & Plastics Division sales
-In the fiscal year ended December 31, 2018, the Interior and Plastics Division increased external sales by 19.5% to MYR 749.6 million. Higher demand for products was caused due to the initiative to temporarily eliminate the GST from June to August 2018 as well increased localization content to OEM customers throughout the year.

5) Electrical & Heat Exchange Division sales
-The Company’s Electrical and Heat Exchange Division had external sales of MYR 112.0 million in the fiscal year ended December 31, 2018, a decrease of 8.0% from the previous year. The main causes for the decrease in sales were decreased demand for the products in the division and the retirement of a product that had reached the end of its lifecycle.

Awards

--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, 2018	FY ended Dec. 31, 2017	FY ended Dec. 31, 2016
Overall	15.0	11.3	8.5

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.

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

Capital Expenditure

(in million MYR)

	FY ended Dec. 31, 2018	FY ended Dec. 31, 2017	FY ended Dec. 31, 2016
Total	43.1	93.4	88.9

-The Company’s capital expenditure in the fiscal year ended December 31, 2018 was primarily invested towards upgrading its facilities and the setup of new production lines.

-The Company’s Suspension Division is working towards the automation of its operations through the investment of the most recent equipment and infrastructure. The division will focus on expanding its product line as well, especially in suspension kits for SUVs.