KUALA LUMPUR, 29 November 2019 – UMW Holdings Berhad registered consolidated net profit attributable to shareholders of the Company of RM110.3 million for the third quarter ended 30 September 2019, its highest in the last four quarters.
UMW stated that the result was supported by stable revenue and profit before taxation (PBT) from the Manufacturing & Engineering (M&E) segment.
“The Automotive and Equipment segments, however, registered lower revenue and PBT due to sluggish demand in the current quarter. UMW Holdings Berhad’s revenue from Continuing Operations decreased by 12.4% year-on-year to RM2,882.7 million and PBT from Continuing Operations contracted by 15.2% to RM150.3 million.
UMW Holdings Berhad President & Group CEO, Badrul Feisal bin Abdul Rahim said the Automotive segment will focus on introducing new, appealing and value-for-money models to remain competitive in the Malaysian automotive industry, supported by their new automotive assembly plant in Bukit Raja.
“Expansion of products and rental business are expected to drive the performance of the Industrial Equipment sub-segment, while Heavy Equipment business may benefit from the recent revival of some infrastructure projects in Malaysia,”
“Meanwhile, the outlook for the M&E segment remains upbeat as we continue to ramp-up production and delivery of fan cases to Rolls-Royce, whilst demand for auto components products and lubricants is expected to be sustainable over the long term,” he said.
The Automotive segment’s revenue of RM2,296.9 million was 13.1% lower than the RM2,643.4 million registered in the corresponding quarter. Goods & Services Tax (GST)-free period in Malaysia from 1 June 2018 to 31 August 2018 contributed to the enhanced vehicle sales and revenue for the segment in the corresponding period.
Notwithstanding an increase in share of profit from an associated company, PBT reduced by 7.4% to RM140.1 million compared to the RM151.3 million reported in the corresponding quarter.
In the third quarter of 2019, the Equipment segment’s revenue declined by 12.3% to RM353.7 million as both Heavy and Industrial business sub-segments reported lower revenue following sluggish demand. Subsequently, PBT narrowed to RM30.8 million.
The Equipment segment’s outlook remains challenging as demand in the construction, manufacturing, mining and logging sectors are likely to be sluggish for the rest of the year. However, revival of some major infrastructure projects in Malaysia, improving demand in Singapore and Papua New Guinea, and expansion of product line-up in Vietnam are anticipated to minimise the downward pressures on the segment’s performance.
The M&E segment’s revenue of RM252.4 million was marginally lower than the RM253.6 million reported in the corresponding quarter. Correspondingly, PBT of RM15.4 million was comparable to the RM15.5 million recorded in the corresponding quarter.
Demand for auto components and lubricants products is expected to be stable over the near term. A steady growth in the Aerospace business, on the back of planned production and delivery of fan cases is expected to underpin the segment’s healthy performance for the remainder of the year.
Despite the challenging business environment, the company has declared a special dividend of 4.0 sen per share in respect of the financial year ending 31 December 2019.