UMW adopts 2-pronged approach to face challenges
PETALING JAYA: UMW Holdings Bhd is undertaking a two-pronged approach as it navigates through the challenging course that arose from the coronavirus (Covid-19).
The group’s focus this year, as it heads towards the second half of 2020, would be to ensure sufficient revenue support and to embark on cost reduction and optimisation activities.
Acting president and group chief executive officer Azmin bin Che Yusoff said UMW is actively looking into revenue elevation initiatives, increasing sales across sectors, strategically widening its international footprint and strengthening operating efficiencies and profitability.
“Against the backdrop of an unprecedented challenging business environment, UMW has set in place measures to mitigate the adverse effects of a dampened business outlook and weak private consumption.
“Through our customer-centric approaches and stringent cost optimisation exercises, UMW will remain competitive throughout this period of global uncertainty.
“Generating meaningful returns is our top priority and the group’s resilience and implementation of agile short-to-medium term measures will ensure that this goal is met,” he said in a statement after the group’s AGM, which was held virtually.
UMW’S revenue support will be driven by all three of its core business segments, with the automotive segment implementing innovative sales and after-sales campaigns including sales via online platforms, coupled with attractive financing packages.
For its manufacturing and engineering (M&E) segment, UMW is capitalising on the recent approval for 24-hour operations at its facility to ramp-up production of fan cases for Rolls-royce, while sustaining export sales for KYBUMW’S shock absorbers.
As for the equipment segment, the group is working closely with its principals by extending promotional packages to support customers affected by Covid-19.
Focus is also on ensuring parts availability to take advantage of the expected surge in demand post-lifting of movement restrictions.
In the statement, UMW said it was also aggressively pursuing further cost containment and optimisation initiatives such as reviewing, reducing and optimising operational expenditures, while working on deferral of non-critical operational and capital expenditures.
“UMW is also improving its inventory management and optimising its production capacity while ensuring consistent engagement with customers, principles and OEMS.
“These measures will ensure consistent performance across all business sectors despite the challenging external environment,” it said.
It added that besides being supported by a strong financial position, it would focus on managing strong cash flow controls while enhancing and redeploying existing resources to remain resilient.
For the financial year ended Dec 31, 2019, UMW’S net profit jumped 32% y-o-y from Rm344.5mil in 2018 to Rm454.4mil.
The group also controlled more than half of the market in Malaysia’s automotive industry for the first time in history last year, which saw Toyota and Perodua collectively garnering 51.4% of the market share.