KUALA LUMPUR (May 23): UMW Holdings Bhd’s first quarter ended March 31, 2017 (1QFY17) saw its net profit rise 21.65% to RM20.17 million, from RM16.58 million last year, due to higher revenue from its automotive business.

The group’s total revenue for the quarter under review grew 27% to RM2.8 billion, from RM2.2 billion in 1QFY16.

In a filing with Bursa Malaysia, the diversified group which is undergoing a demerger exercise to split from UMW Oil and Gas Corp Bhd, said revenue from the automotive segment improved 41% to RM2.19 billion during 1QFY17, from RM1.56 billion a year ago, contributed by orders spilled over from December 2016, as year-end promotions boosted consumer buying sentiments.

Over 78% of the group’s total revenue for 1QFY17 came from the automotive segment, under which it distributes the Toyota brand of vehicles.

"The improved sales translated to higher market share for Toyota, from 8.0% in the first quarter of 2016 to 11.8% in the quarter under review," it said.

Nevertheless, UMW said these improvements were offset by higher losses incurred by its oil and gas (O&G) segment, which was affected by volatile oil prices.

Moving forward, UMW said the automotive segment for FY17 is expected to be competitive, as margins are being pressured due to a stronger US dollar and sluggish consumer sentiment.

As for its O&G segment, although challenging, UMW said it is in the midst of implementing its exit strategy from the industry.

“The group’s performance will still be affected by the downturn in the O&G industry, until the completion of the exit plan. The strong US dollar is expected to impact the business margins of the automotive segment,” the group commented.

UMW’s share price gained three sen or 0.5% to RM5.91 today, giving it a market capitalisation of RM6.91 billion. Year-to-date, the counter has gained 32%, from RM4.47 on Jan 3 this year.