UMW’s 4Q exceeds expectations, analysts raise earnings forecast

KUALA LUMPUR: UMW Holdings Bhd’s (UMW) fourth quarter of the financial year 2020 (4QFY20) performance generally exceeded expectations and as such, analysts have raised their projections on the group with its earnings expected to be driven mainly by its auto division.

According to MIDF Amanah Investment Bank Bhd’s research house (MIDF Research), UMW reported a very strong 4Q20 core net profit of RM174 million, which was more than 100 per cent increase, year-onyear (y-o-y) and it brought its FY20 core earnings to RM241 million.

It pointed out that this was well ahead of expectations.

The FY20 core earnings is derived after normalising for RM29 million share of loss from 30 per cent-owned Toyota Capital, which was impacted by present value impact of loan-moratorium mainly – this was recognised mainly in 2Q20, provision made up to Sept 30, 2020, RM109 million loss on sale and liquidation of unlisted O&G investments, RM55 million reversal of receivables impaired previously, RM24 million gain on disposal

of assets & properties, RM6 million reversal of inventory write-down, RM7 million forex loss, and RM10 million gain on derivatives.

“Given the much stronger than expected FY20 earnings, we raise our FY21F projections by 33 per cent.