KUALA LUMPUR (Aug 27): UMW Holdings Bhd reported a 32% fall in its net profit to RM84.189 million for the second quarter ended June 30, 2019, from RM124.38 million a year earlier as the group recorded a one-off provision reversal in the previous year.

Quarterly revenue rose 2% to RM2.97 billion from RM2.92 billion in the previous corresponding quarter.

“The increase in revenue was mainly due to higher sales in the automotive and manufacturing & engineering segments,” said the group.

Meanwhile, the lower profit for the quarter was attributed to a one-off reversal of provisions amounting to RM207 million, which was recorded in the previous year.

“Excluding the corresponding quarter’s reversal of provisions, this quarter’s profit of RM179.1 million was higher than the RM110.7 million profit in the corresponding quarter,” it said.

The group’s automotive segment saw better performance amid higher share of profit from an associated company, following higher vehicle sales made in the current quarter.

The manufacturing & engineering segment also recorded higher profit year-on-year, mainly contributed by higher volume of fan cases delivered by the aerospace business and higher sales of other major products.

Meanwhile, the equipment segment posted lower profit, due to lower demand for heavy equipment products in the current quarter.

For the first half of its financial year, net profit stood at RM170.69 million, 14% lower than the RM198.46 million recorded for the same period a year earlier. Cumulative revenue increased 8% to RM5.74 billion from RM5.33 billion.

Going forward, the group expects sales for its automotive segment to remain stable, as it has new models lined up with competitive pricing, along with the recent reduction in banks’ base lending rates.

The equipment segment is anticipated to see higher demand, given the revival of major infrastructure projects by the Government.

“In addition, the expansion of the overseas market is expected to contribute to higher sales in the second half of this year. Productivity improvements and cost management initiatives will help to cushion the impact from rising market competition,” it said.

The manufacturing and engineering segment is expected to remain positive with higher vehicle sales and parts replacements, with production and delivery of fan cases seen to increase in the remainder of the year.

UMW fell 1 sen or 0.2% to RM5.04, giving it a market capitalisation of RM5.89 billion.