KUALA LUMPUR, Nov 29 (Bernama) -- 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.  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, “Despite the continued challenging economic and operating environment, the Group continues to deliver healthy and encouraging results.  We are implementing strategic and innovative initiatives across the Group through our transformation agenda which have seen promising results so far in delivering greater value to our shareholders.  The Group is also actively implementing cost optimisation initiatives to improve our business performance and operational productivity.”
 
Badrul further quipped, “The Automotive segment will focus on introducing new, appealing and value-for-money models to remain competitive in the Malaysian automotive industry, supported by our 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.”
 
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. 

Moving forward, the automotive business will continue its aggressive marketing and promotions campaigns for the remainder of the year.  The recent launch of an all-new model in the third quarter of 2019 as well as enhancements added to current product offerings are expected to contribute positively to the automotive segment’s sales performance in the coming quarters.  Meanwhile, performance of an associated company is expected to remain strong for the rest of this year.
 
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.
 
Badrul added, “We are optimistic that the strong performance in the last three quarters will enable us to meet our projections for the full financial year, which is a testament to the resilience of our businesses.”
 
“We are confident that the success of the undertaken transformation initiatives will continue to generate higher value to the shareholders and contribute positively to the Malaysian economy at large.”  

SOURCE: UMW CORPORATION SDN BHD 

FOR MORE INFORMATION, PLEASE CONTACT: 
Name: S Vikneshwaran
General Manager
Investor & Media Relations
UMW Corporation Sdn. Bhd.
Tel: +603 2025 2104
Email: vikneshwaran.s@umw.com.my

--BERNAMA