KUALA LUMPUR (Nov 19): MBM Resources Bhd weak third quarter results is a "transitional and not structural decline", group Managing Director Looi Kok Loon said today.

The company yesterday reported a 27.4% drop in 3Q net profit to RM25.5 million from RM35.1 million previously, while revenue fell nearly 12% to RM485.1 million from RM549.3 million.

"This third quarter [results] to me is historical. It is not a structural decline, which means that it is not permanently declining, but it is a transition," he told reporters at the EGM.

Looi said he had expected the weaker results for the Hari Raya-shortened third quarter, which was also impacted by the transition in production to Perodua Axia from Perodua Viva.

Looi said the firm's JV company Oriental Metal Industries (M) Sdn Bhd (OMI), which manufactures steel and alloy wheels, is expected to improve its performance from December onwards.

He said the JV company would be narrowing its losses in the next financial year.

Looi foresees alloy wheel production to bump up to 12,000-15,000 units per month in the first half of next year from the current 3,000-4,000 units per month.

He also foresees MBM Resources' service throughput to grow an average of 10% annually.

Shares of MBM Resources were down 6 sen or 2.1% to RM2.76 at midday break. The firm saw trades of 119,300 shares.