KUALA LUMPUR, Feb 26 – Supported by strong automotive sales, UMW Holdings Berhad (“Group”) registered profit after tax and minority interests (“PATAMI”) of RM137.4 million for the fourth quarter ended 31 December 2020. Group revenue increased by 3.8% to RM3,242.3 million compared with the corresponding quarter ended 31 December 2019 (“corresponding quarter”) mainly due to higher vehicle sales, spurred by the sales tax exemption.
Excluding the one-off gain on land disposals of RM188.1 million reported in the corresponding quarter, the Group’s profit before taxation (“PBT”) of RM236.9 million in the last quarter of 2020 more than doubled the RM109.7 million achieved in the corresponding quarter. Despite the challenging market conditions, UMW has declared a final dividend of 4.0 sen per share amounting to RM46.7 million in respect of the financial year ended 31 December 2020.
UMW Holdings Berhad President and Group CEO, Dato’ Ahmad Fuaad Kenali said, “The Group achieved improved results in the fourth quarter of 2020 as we recorded higher automotive sales mainly due to the sales tax exemption. In addition, the Group also had taken steps to improve its resilience through operational efficiencies and robust cost optimisation initiatives that have also contributed positively to its results.”
Buoyed by the higher number of vehicles sold due to the sales tax exemption, the Automotive segment’s revenue for the fourth quarter of 2020 increased by 8.9% to RM2,668.2 million compared with the corresponding quarter. Both UMW Toyota Motor and Perodua exceeded their revised sales targets for 2020. This in turn resulted in the segment’s PBT to surge by 66.3% to RM191.0 million. Consistent with the expected strong rebound in the economy in 2021 with a GDP forecast of between 6.5% and 7.5%, the Malaysian Automotive Association has projected the total industry volume (“TIV”) to increase by 8% to 570,000 units mainly driven by the extension of sales tax exemption until 30 June 2021 as well as the low interest rate environment. The Group will ensure its products as well as services will continue to remain competitive to meet its customers’ expectations.
Both the Equipment and Manufacturing & Engineering (“M&E”) segments were impacted by the COVID-19 pandemic. Moving forward, the Heavy Equipment sub-segment could benefit from the encouraging demand in the mining and construction sectors in its overseas operations, while the Industrial Equipment sub-segment will continue to extend various recovery packages to its customers. For the M&E segment, the extension of sales tax exemption and the projected 8% growth in TIV are expected to drive demand for auto components and lubricants in 2021.
Meanwhile, the Aerospace sub-segment is continuously exploring opportunities to improve its plant utilisation in line with its products and end-customer diversification strategy. Dato’ Fuaad added, “The Group will constantly assess its strategies and initiatives as well as continue to implement cost optimisation initiatives across the Group to improve resilience and mitigate the impact from the COVID-19 pandemic.”