UMW Holdings Berhad’s (“Group”) profit after taxation and minority interests (“PATAMI”) surged to RM303.6 million for the second quarter ended 30 June 2023 (“Q2 2023”), compared with the RM107.2 million registered in the corresponding quarter ended 30 June 2022 (“corresponding quarter”), mainly attributed to the increase in revenue by 20.2% to RM4,484.9 million as well as completion of sale of industrial land in Serendah to Longi (Kuching) Sdn. Bhd. (“Longi”) during the quarter for RM304.9 million. The Group’s profit before taxation and zakat (“PBTZ”) more than doubled to RM476.0 million compared with the RM230.0 million registered in the corresponding quarter supported by higher contribution from all three core business segments as well as recognition of RM218.1 million profit from the sale of the industrial land to Longi.
The Automotive segment’s revenue for Q2 2023 increased by 9.6% to RM3,417.2 million compared with the RM3,117.4 million recorded in the corresponding quarter, mainly due to the higher number of vehicles sold. In line with the higher revenue, the segment’s PBTZ of RM212.8 million was higher than the RM202.9 million reported in the corresponding quarter. The Malaysian Automotive Association (“MAA”) has recently revised upwards its Total Industry Volume (“TIV”) forecast for 2023 by 11.5% to 725,000 units from 650,000 units, supported by the high industry outstanding orders of over 300,000 units. The Group anticipates that the Automotive segment will continue to perform well in the second half of 2023 to meet the higher mobility needs as the economy continues to expand.
The Equipment segment’s revenue increased by 24.4% to RM456.2 million in Q2 2023 mainly due to the higher delivery of equipment for both local and overseas markets. Supported by the higher revenue, the segment’s PBTZ grew by 38.4% to RM49.1 million for Q2 2023. The outlook for the Equipment segment remains positive in all the sectors that it serves, underpinned by the encouraging demand amid the recovery in global economic growth as well as resumption of infrastructure and construction projects. With the improving supply chain, the segment plans to introduce more new models to cater to the growing demand. Furthermore, the segment will continue to work closely with its principals to further improve competitiveness of its products and services.
Manufacturing & Engineering (“M&E”) segment
The M&E segment registered revenue of RM299.7 million in Q2 2023, 32.4% higher than the RM226.4 million recorded in the corresponding quarter. The improved performance was mainly attributable to the higher contribution from the Aerospace sub-segment due to higher delivery of fan cases. Consequently, the segment’s PBTZ surged to RM21.8 million in the current quarter, 67.1% higher than the RM13.1 million reported in the corresponding quarter.
Going forward, the Auto Components and Lubricants sub-segments are expected to grow in line with the improving demand for automotive products for the remainder of the year following the upward revision of TIV by the MAA.
The reopening of international borders and the increase in air travel which is expected to reach close to 95% of the pre-pandemic level by the end of this year will bode well for the Aerospace sub-segment. Rolls-Royce’s three-year forecast indicates that orders for aircraft are expected to continue to improve beyond pre-Covid-19 levels. The higher expected orders for fan cases will increase the plant utilisation rate and is expected to contribute positively to the Aerospace sub-segment for the second half of 2023.
UMW Holdings Berhad President and Group CEO, Dato’ Sri Ahmad Fuaad Kenali said, “We are pleased with the Group’s strong performance in the second quarter of 2023, which exceeded the pre-pandemic levels. Moving forward, the Group will continue to focus on strengthening its businesses through operational efficiency and cost management initiatives as well as accelerate its CREST@UMW initiatives to improve its resilience and sustainability. The Group expects to deliver satisfactory performance for year 2023.”