This article first appeared in The Edge Financial Daily on November 21, 2019

KUALA LUMPUR: UMW Holdings Bhd has revised downwards its net profit for the second quarter ended June 30, 2019 (2QFY19) by 32% owing to a blunder which it said does not affect the accuracy of other published announcements.

Stating that it had “inadvertently omitted an elimination for the reversal of provision for a financial guarantee amounting to RM27 million”, the conglomerate clarified that the adjustment would result in a 32% decline in net profit to RM57.19 million for 2Q, and not RM84.19 million as announced in August. The revised profit is 54% lower than the RM124.38 million posted in the same period last year.

Earnings per share for the quarter was also adjusted to 4.9 sen from 7.21 sen as stated previously. However, there was no revision to the company’s revenue of RM2.97 billion for the second quarter.

Consequently, for the cumulative six months, net profit was restated to a decline of 27.6% to RM143.69 million, from RM198.46 million in the same period last year, while revenue increased 8% to RM5.74 billion from RM5.33 billion.

“The board, via its audit committee, wishes to emphasise that it views the incident seriously and has instructed the management to conduct an in-depth review of all processes to ensure that sufficient controls are in place,” UMW said in a filing with Bursa Malaysia yesterday.

Management has also taken immediate steps to strengthen the Group’s financial disclosures to ensure such incidents do not recur in the future, it added, giving assurance that “this incident relates to a singular item and does not affect the accuracy of any other published announcements.”

It said it is “fully dedicated to its responsibilities as a public listed company and committed to continue upholding best practices in corporate disclosure.”

Shares in UMW closed three sen or 0.67% higher at RM4.50 yesterday, valuing the company at RM5.26 billion.