SHAH ALAM, 24 May 2016 –.UMW Holdings Berhad recorded revenue and profit before taxation of RM2,199.2 million and RM21.1 million respectively, for the quarter ended 31 March 2016. The Group’s revenue and profit before taxation were 32.1% and 93.4% lower than the previous corresponding quarter’s results which stood at RM3,240.4 million and RM320.1 million respectively. The continued low oil prices, weak ringgit and soft market sentiment had adversely affected the Group’s financial performance.
The Automotive segment recorded a revenue of RM1,556.0 million in the first quarter of 2016, RM449.6 million or 22.4% lower compared to the previous year’s corresponding quarter. The segment continued to be negatively impacted by the weak ringgit and poor consumer sentiment. The segment closed the quarter with a lower profit before taxation of RM82.7 million.
The Equipment segment achieved a revenue and profit before taxation in the first quarter of 2016 of RM358.0 million and RM39.2 million respectively. The segment’s revenue and profit before tax were lower by 45.2% and 60.5% compared to RM653.0 million and RM99.3 million, recorded in the corresponding period of 2015. The performance was largely affected by the weak market sentiment in the construction and mining sectors. The exceptionally better performance for the first quarter 2015 was due to forward purchases by customers prior to implementation of GST in April 2015 as well as higher demand for heavy equipment in Myanmar, following resumption of jade mining activities in Hpakant province in late 2014.
The Oil & Gas segment recorded revenue and loss before taxation in the current quarter of RM87.7 million and RM68.4 million respectively. The segment’s poor performance was due to reduced time charter rates as well as soft demand for drilling services arising from continued low oil prices and reduced operating and capital expenditure from oil majors.
The Manufacturing & Engineering segment recorded RM145.5 million revenue and RM6.6 million profit before taxation in the current quarter. The revenue was 15.0% lower compared to the same quarter of 2015, due to lower demand for lubricants and auto components products. However, the profit before taxation improved over the corresponding quarter of 2015 mainly from the automotive shock absorbers business. Successful disposal of the loss-making automotive components companies in India in November 2015 had also contributed to the segment’s better results.
The Group expects a challenging year ahead with the weakening ringgit, uncertainties surrounding oil prices, soft market sentiment and intense competition from other automotive players in the industry. “The current gradual improvement in the oil prices provides prospects for potential recovery in the medium to long term but the near term volatility willl continue to pose challenges to the segment in 2016. However, the management will continue to implement cost cutting measures to mitigate the impact of the market volatility on the Group performance,” says Badrul Feisal bin Abdul Rahim, its President & Group CEO.