UMW swings back to profit in sec­ond quar­ter

The Star Malaysia - StarBiz - - News - By GANESHWARAN KANA ganeshwaran@thes­

PETALING JAYA: Di­ver­si­fied con­glom­er­ate UMW Hold­ings Bhd has recorded earn­ings of RM124.38mil in its sec­ond quar­ter to endJune, pri­mar­ily at­trib­uted to strong rev­enue con­tri­bu­tion from its au­to­mo­tive seg­ment and the re­ver­sal of pro­vi­sions.

In the pre­vi­ous year’s cor­re­spond­ing quar­ter, UMW posted a net loss of RM209.3mil due to a loss on the de­merger of UMW Oil and Gas Corp Bhd.

Rev­enue-wise, the group reg­is­tered a 5.86% in­crease year-on-year (y-o-y) to RM2.92bil.

UMW said in a state­ment that its core busi­ness seg­ments of au­to­mo­tive, equip­ment as well as man­u­fac­tur­ing and en­gi­neer­ing (M&E) saw higher rev­enue in the sec­ond quar­ter, largely due to in­creased con­sumer de­mand af­ter the goods and ser­vices tax was zero-rated.

“The group is now firmly on the re­cov­ery path and we are in an even bet­ter po­si­tion to ex­e­cute our long-term growth strategy and en­hance share­holder value,” said UMW pres­i­dent and group chief ex­ec­u­tive of­fi­cer Badrul Feisal Ab­dul Rahim.

The con­glom­er­ate did not an­nounce any div­i­dend for the quar­ter in re­view. Earn­ings per share stood at 10.65 sen.

Mean­while, for the first six months of fi­nan­cial year 2018 (FY18), UMW recorded a bot­tom line of RM198.46mil, as com­pared to a net loss of RM189.14mil in the same pe­riod a year ago.

Rev­enue, how­ever, dropped 2.17% y-o-y to RM5.33bil. This was due to the lower to­tal in­dus­try vol­ume faced by the group’s au­to­mo­tive busi­ness.

UMW ex­pects to per­form sat­is­fac­to­rily for the rest of FY18 amid the rein­tro­duc­tion of the sales and ser­vice tax on Sept 1, which could dampen con­sumer de­mand in the au­to­mo­tive seg­ment.

“For the equip­ment seg­ment, the heavy equip­ment busi­ness may be im­pacted by the on­go­ing re­view of the mega-in­fra­struc­ture projects in the coun­try. Nev­er­the­less, given the cur­rent level of or­ders se­cured, the busi­ness is ex­pected to per­form sat­is­fac­to­rily.

“Fur­ther­more, the in­dus­trial equip­ment rental busi­ness is ex­pected to per­form well in the sec­ond half of the year, driven by de­mand from the ware­house and lo­gis­tics sec­tor.

“In the M&E seg­ment, sus­tained de­mand for auto com­po­nents and lu­bri­cants is fore­cast to con­trib­ute to bet­ter re­sults.

“More­over, the aerospace busi­ness is cur­rently pro­duc­ing and de­liv­er­ing the fan cases to Rolls-Royce as per the con­trac­tual re­quire­ment,” stated the com­pany.

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