UMW swings back to profit in second quarter
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.