KUALA LUMPUR (Nov 25): UMW Holdings Bhd returned to the black with a net profit of RM101.28 million for its third quarter ended Sept 30, 2020 (3QFY20), versus a net loss of RM78.44 million it posted in the immediate preceding 2QFY20, as all three of its core business segments registered improvements with the easing of movement restrictions that were implemented to curb the spread of the Covid-19 pandemic.

Revenue jumped 74% quarter-on-quarter to RM2.66 billion from RM1.53 billion, the group said in a statement today.

On a year-on-year basis, the group's net profit is down 8% from the RM110.29 million it recorded in 3QFY19, when revenue came in higher at RM2.89 billion.

UMW Holdings president and group chief executive officer Datuk Ahmad Fuaad Kenali said the group is gradually registering improved financial results with the easing of the Movement Control Order (MCO) while the group's continued cost optimisation initiatives have resulted in sustainable improvements to its bottom line.

In particular, he noted that the group's automotive sales grew following the Government’s announcement of the sales tax exemption on completely knocked down (CKD) vehicles and completely built up (CBU) vehicles, effective June 15-Dec 31, which is targeted at spurring the growth of the local automotive market.

The automotive segment’s revenue jumped 93.1% q-o-q to RM2.13 billion which brought profit before tax of RM131.6 million versus a loss before tax of RM41.7 million previously.

As for its equipment segment, revenue rose 27.3% q-o-q to RM297 million from RM233.2 million while PBT grew 38.1% to RM34 million on improved demand for the segment’s products and services.

Meanwhile, its improved auto component and lubricant sub-segments lifted its manufacturing and engineering segment's revenue to RM242.3 million, up 32.1% q-o-q from RM183.3 million previusly, while PBT jumped over two times to RM20.3 million from RM8 million.

For the nine months ended Sept 30, however, the group's net profit sank 74% to RM67.16 million from RM253.98 million last year as revenue fell 27% to RM6.31 billion from RM8.64 billion.

Moving forward, the group expects the domestic sales of its auto components to further improve following the sales tax “holiday” given to locally assembled cars until year end, coupled with lower interest rates — both of which are expected to spur the local automotive market. As for the lubricants sub-segment, UMW said it will continue to leverage on its original equipment manufacturer partners and strengthen its domestic and overseas sales.

“We will continue to focus on strengthening our core business segments and cost optimisation initiatives to improve our business performance and productivity. Amidst the challenging business environment, we will strive to maintain our performance and continue to deliver value to our customers and shareholders,” Ahmad Fuaad added.

UMW shares closed two sen or 0.74% lower at RM2.68 today, giving it a market capitalisation of RM3.13 billion.