Thursday 28 Mar 2024
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KUALA LUMPUR (Nov 27): UMW Holdings Bhd's net profit nosedived 93.1% year-on-year (y-o-y) to RM13.5 million in the third quarter ended Sept 30, 2015 (3QFY15) from RM197 million, mainly due to the weaker performance of its automotive and oil and gas (O&G) segments, both of which were hit by higher operating costs.

Revenue for 3QFY15, however, saw a softer drop of 4.6% to RM3.5 billion from last year's RM3.7 billion, its statement to Bursa Malaysia yesterday showed.

Segmentally, its automotive segment saw its profit before tax (PBT) fall 67% y-o-y to RM113.93 million in 3QFY15 from RM343.94 million, due to the weakening of the ringgit, and higher campaign and promotion expenses.

As for the segment's 1.8% drop in revenue to RM2.6 billion, UMW said it faced stiff competition following new model launches by other players, and weaker consumer sentiment.

Its O&G segment's PBT also fell a significant 84.9% y-o-y to RM11.5 million in 3QFY15 from RM75.9 million last year.

Not only are some of its rigs seeing lower time charter rates and lower utilisation, the segment was "further weighed down by the additional operating expenses from the new offshore premium jack-up rig UMW NAGA 7, which has not secured any contract during the reporting period".

The segment's revenue came to RM212.7 million, down 16.4% from the previous corresponding quarter's RM254.3 million.

UMW's equipment segment, meanwhile, reported a 45% rise in PBT to RM64.38 million, in line with a 9.21% rise in sales to RM474.78 million.

The group's manufacturing and engineering segment also bounced back from a loss of RM1.48 million in 3QFY14 to a PBT of RM752,000 in the quarter under review, due to an improvement in the segment's lubricant business, cost-cutting measures, and higher foreign exchange gains.

For the nine-month period (9MFY15), UMW's net profit fell by 57% to RM247.12 million or 21.15 sen a share, on revenue of RM10.26 billion. The group blamed the abysmal performance on its automotive division, with its stiff competition and higher operating costs.

"The group expects its outlook to be very challenging in view of depressing oil prices, volatility of ringgit, weak consumer sentiments and uncertain economic environment. Nevertheless, management will continue to improve operational efficiencies and contain cost," said UMW on its outlook.

UMW, an FBM KLCI component index with a market capitalisation of RM50.12 billion, rose by eight sen or 0.98% to close at RM8.28 yesterday.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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