SHAH ALAM, 29 August 2016 –UMW Holdings Berhad recorded a revenue of RM2,846.8 million for the second quarter ended 30 June 2016, representing RM638.5 million or 18.3% lower than the RM3,485.3 million recorded in the same period of 2015. All business segments recorded lower revenue compared to the previous year’s corresponding quarter. In line with the lower revenue, the Group generated a lower profit before taxation of RM44.8 million against RM207.6 million in the previous year’s corresponding quarter.

The Automotive segment recorded a lower revenue of RM2,177.1 million for the second quarter of 2016 compared to RM2,732.7 million registered in the previous year’s corresponding quarter as a result of intense competition from other automotive manufacturers. Consequently, the segment registered a lower profit before taxation of RM133.3 million for the quarter, i.e. 49.4% lower than the RM263.4 million profit before taxation recorded in the previous year’s corresponding quarter. The continued weakening of ringgit had also affected the segment’s profit for the quarter.

Equipment segment’s revenue of RM351.2 million for the second quarter of 2016 was marginally lower than RM353.6 million recorded in the same period of 2015, mainly attributable to the slowdown in the construction and mining sectors and the restriction imposed on the importation of heavy equipment into the country by the new government in Myanmar. Nevertheless, the profit before taxation improved from RM33.7 million to RM43.3 million through better cost management. The Oil & Gas segment’s revenue of RM130.0 million for the current quarter was 29.1% or RM53.4 million lower than the previous year’s corresponding quarter of RM183.4 million. The reduction in revenue was due to lower time charter rates and lower utilisation of assets for the segment.

Consequently, the segment recorded a loss before taxation of RM64.0 million for the current quarter compared to profit before taxation of RM8.0 million reported in the corresponding quarter of 2015. The Manufacturing & Engineering segment recorded a revenue of RM157.0 million in the current quarter, RM8.4 million lower or 5.1% lower than the RM165.4 million reported in the previous year’s corresponding quarter. Despite the lower revenue, profit before taxation increased from RM0.4 million to RM10.9 million in the current quarter, mainly attributable to the better performance of shock absorbers and lubricant businesses.

Softening consumer sentiment continues to affect the automotive market and intense competition from all auto players deploying aggressive marketing strategies to boost sales continue to pose challenges to the Group. “Oil price has the potential for recovery in the medium term with the Brent benchmark oil price stabilising at about USD40 per barrel for more than four months recently. The increase in tendering activities for drilling services indicates potential upturn in the medium term though these tenders may take months to translate into rig utilisation. The UMW Group continues to implement appropriate measures to improve operational efficiencies and contain cost,” says Badrul Feisal bin Abdul Rahim, its President & Group CEO.