SHAH ALAM, 29 November 2016– UMW Holdings Berhad recorded a revenue of RM2,856.8 million for the third quarter ended 30 September 2016, representing RM676.4 million or 19.1% lower than the RM3,533.2 million recorded in the same period of 2015. The challenging economic environment in the Oil & Gas industry coupled with the weakening ringgit had impacted the Group’s results. Consequently, the Group reported a loss before taxation of RM121.6 million against a profit of RM72.2 million in the previous year’s corresponding quarter.
The Automotive segment recorded a lower revenue of RM2,263.4 million for the third quarter of 2016 compared to RM2,596.1 million registered in the previous year’s corresponding quarter as a result of soft market sentiments and intense competition from other automotive manufacturers. The total industry volume (TIV) for the third quarter of 2016 was 142,974 units, a drop of 12% compared to 163,235 units in the same quarter of 2015.
Nevertheless, profit before taxation improved from RM113.4 million in the third quarter of 2015 to RM133.5 million in the current quarter. The record sale of the new model, Perodua Bezza that was launched in July 2016 contributed to the better profit performance. Equipment segment’s revenue of RM342.8 million for the third quarter of 2016 was a decrease of 27.8% or RM132.0 million against RM474.8 million recorded in the same period of 2015. This was mainly attributable to the decline in equipment sales resulting from the slowdown in the mining sector and stiff competition in the construction sector.
Sales performance in Myanmar was weighed down by the continued restriction imposed on the importation of heavy equipment into the country by the government of Myanmar. In tandem with the lower revenue, profit before taxation decreased from RM64.4 million recorded in the third quarter of 2015 to RM33.6 million in the current quarter.
The Manufacturing & Engineering segment recorded a revenue of RM144.6 million in the current quarter, RM39.2 million or 21.3% lower than the RM183.8 million reported in the previous year’s corresponding quarter. Nevertheless, profit before taxation improved from RM0.8 million to RM2.5 million in the current quarter, mainly attributable to the better performance of shock absorber business. The Oil & Gas (Listed) segment registered a revenue of RM49.7 million, a reduction of RM163.0 million from the same quarter of 2015 of RM212.7 million. Fewer income-generating assets coupled with the continued pressure on charter rates significantly impacted the revenue of the segment.
On the back of the lower revenue, the segment reported a loss before taxation of RM133.0 as opposed to a profit before taxation of RM11.5 million in the same quarter of 2015. The Oil & Gas (Unlisted) segment registered a lower revenue of RM58.4 million in the current quarter, a drop of RM11.6 million compared to the RM70.0 million in the same quarter of 2015. The adverse performance of the segment was mainly due to the impact of continued low oil prices. Nevertheless, lower loss of RM36.1 million was reported compared to the loss of RM65.1 million reported in the same quarter of 2015, mainly attributable to lower operating costs from the onshore drilling operations in Oman.
“The performance of the Group is affected by the present downturn in the oil and gas industry, softer local demand for motor vehicles and weakening ringgit. The challenges and uncertainties in the current business environment may add pressure for asset impairment in the last quarter of the year, hence, may adversely impact the Group’s results. Nevertheless, management will take appropriate measures to contain cost, increase operational efficiency and continue to improve business potentials,” says Badrul Feisal bin Abdul Rahim, its President & Group CEO.