KUALA LUMPUR, 27 August 2019 – The Automotive and Manufacturing & Engineering (M&E) segments of UMW Holdings Berhad recorded satisfactory performance in the second quarter ended 30 June 2019; with higher sales of vehicles and auto components, as well as higher number of fan cases delivered. UMW Holdings Berhad’s revenue from Continuing Operations increased by 1.6% year-on-year to RM2,966.0 million. Excluding the corresponding quarter’s reversal of provisions, this quarter’s PBT of RM179.1m was higher than the PBT of RM110.7 million in the corresponding quarter. The Group registered consolidated net profit of RM84.2 million for the second quarter of 2019.
– Automotive segment’s profit before taxation (PBT) grew 6.1%
– Manufacturing & Engineering (M&E) segment’s PBT rose more than 100%
UMW Holdings Berhad President & Group CEO, Badrul Feisal bin Abdul Rahim said, “Our second quarter operational results have been encouraging and we are confident that the Group will continue to deliver value to our shareholders with the strategic initiatives we have in place. Furthermore, we are actively enhancing our operational efficiencies through cost optimisation initiatives and better business synergies. Our highly-efficient and productive new Bukit Raja automotive assembly plant, coupled with higher local content in the Toyota Vios and Yaris models produced, have improved our margins in the competitive automotive segment. We are aggressively expanding our rental business in the Industrial Equipment segment where we currently manage a fleet of more than 9,000 units in the region. Meanwhile, the outlook for the M&E segment remains healthy as we continue to ramp-up production of fan cases for Rolls-Royce, whilst the demand for automotive components and lubricants continue to be on the rise with higher sales of new vehicles.”
The Automotive segment’s PBT increased by 6.1% to RM151.1 million, driven by higher sales and higher share of profit from an associated company. The segment’s revenue of RM2,386.4 million was higher than corresponding quarter’s revenue of RM2,383.7 million. The segment’s sales outlook is projected to be stable with a line-up of competitively-priced new models and the recent reduction in banks’ base lending rates.
The M&E segment’s revenue of RM244.5 million was 37.1% higher than the RM178.3 million reported in the corresponding quarter, driven by higher number of fan cases delivered by the Aerospace business and higher sales of other major products in the current quarter. Following the increase in revenue, the segment recorded a PBT of RM13.2 million as opposed to a loss before tax of RM0.5 million in the corresponding quarter. Strong demand for auto components and lubricants is expected to contribute positively to the segment whilst production and delivery of fan cases are also expected to increase in 2019.
In the second quarter of 2019, the Equipment segment’s revenue declined by 6.1% to RM343.6 million, primarily due to lower revenue from the Heavy Equipment business. Subsequently, PBT narrowed by 6.2% to RM35.5 million. However, revival of major infrastructure projects by the Malaysian Government is anticipated to boost demand for heavy machineries while the Industrial Equipment business is projected to continue performing well, especially in the rental market. Moreover, expansion in high-growth overseas market as well as better operational efficiency measures should cushion the impact of rising competition.
UMW Holdings Berhad’s Discontinued Operations recorded significantly lower loss before taxation of RM1.8 million compared to loss before taxation of RM138.5 million in the second quarter of 2018, following divestments made over the last 12 months.