Shah Alam, 28 February 2008 – The UMW Group today announced  that its Group profit before taxation for the fourth quarter ended 31st December 2007 was RM300.9 million.  This was RM102.9 million or 52.0% higher than the RM198.0 million registered in the same quarter of 2006, and resulted from improved margins and favourable foreign exchange rates, coupled with higher contributions from associated companies.

As a result of the above, net profit attributable to equity holders of the Company for the fourth quarter ended 31st December 2007 increased from the RM91.8 million recorded in the preceding year’s corresponding quarter to RM137.2 million, an increase of RM45.4 million or 49.5%.  

Group revenue of RM2,678.4 million for the fourth quarter ended 31st December 2007 was slightly higher than the RM2,582.9 million achieved in the preceding year’s corresponding quarter by RM95.5 million. The higher revenue was the net result of improved sales from both the Automotive and Equipment segments.

Group revenue of RM9,964.8 million for the year ended 31st December 2007 was marginally higher than the RM9,950.5 million registered in 2006 by RM14.3 million.  The Automotive and Equipment segments contributed to the increase in Group revenue for the year.  

Group profit before taxation of RM841.6 million for the year ended 31st December 2007 was higher than the RM754.3 million registered in 2006 by RM87.3 million or 11.6%. Favourable foreign exchange rates, improved margins from volume and sales mix and higher contribution from associated companies also contributed to the higher Group profit before taxation.

Net profit attributable to equity holders of the Company for the year ended 31st December 2007 increased to RM463.4 million from the RM305.9 million registered in 2006, an increase of RM157.5 million or 51.5%.  The improved performance came from the Equipment and Automotive segments, and higher net profit contributions from the overseas oil and gas associated companies.

Total Toyota and Perodua vehicle sales of 242,568 units represented 49.8% of the total industry volume (“TIV”) of 487,176 units for the year ended 31st December 2007, as reported by the Malaysian Automotive Association (“MAA”).

On the UMW Group’s current prospects, Dato’ Abdul Halim Harun, Group Managing Director & CEO said,  “The Malaysian Government has forecasted the economy to grow by about 6% in 2008 through anticipated private and government-initiated economic activities. MAA has also forecasted the TIV for motor vehicles for the year 2008 to be 510,000 units, an increase of 4.7% over the 487,176 units registered in 2007. The introduction of new models and current competitive pricing are factors expected to sustain the current strong buying interest.”

He further stated that demand for heavy and industrial equipment is anticipated to continue to be strong, particularly from the construction sector, due to activities in the various development corridors as announced by the Government.  The plantation sector is expected to perform well in view of the continued favourable palm oil prices.

As the current high crude oil prices are expected to continue in the foreseeable future, demand for products and services related to the Oil and Gas industry, particularly to the exploration and production sectors, is likely to be positive.

Barring unforeseen circumstances, the Group is expected to achieve a favourable performance level for the year 2008,” he added.

The Board has recommended a final gross dividend of 28.0 sen per share of nominal value RM1.00 each (equivalent to 14.0 sen per share of nominal value RM0.50 each after the share split) less 26% income tax, amounting to approximately RM111.5 million net dividend, for the year ended 31st December 2007 (2006 - 13.5 sen per share less 27% income tax, amounting to RM51.9 million net dividend), to be paid on 5th August 2008.  The annual gross dividend based on per share of RM1.00 each for the year ended 31st December 2007 would be 60.0 sen per share less 27% or 26% income tax, amounting to approximately RM237.5 million of net dividend (2006 - 41.0 sen per share less 28% or 27% income tax, amounting to a net dividend of RM153.9 million).  This is in line with the Group’s announcement of its dividend policy of an annual dividend payout ratio of 50% of net profit attributable to shareholders.

Two changes in the composition of the Group took place during the quarter ended 31 December 2007.  Firstly, on 9th November 2007, PFP Singapore Pte. Ltd., a 75%-owned subsidiary of PFP (Aust) Holdings Pty. Ltd., which is in turn wholly-owned by PFP Holdings Proprietary Limited, a 60%-owned subsidiary of UMW, received the certificate for the establishment of a new company known as PFP (Shenzhen) Piping Materials Co., Ltd. (“PFP Shenzhen”) in Shenzhen, the People’s Republic of China. The intended principal activity of PFP Shenzhen is pipe cladding*. The initial issued and paid-up capital is USD200,000.

Secondly, on 4th December 2007, UMW India Ventures (L) Ltd., a 65%-owned subsidiary of UMW Petropipe, which is in turn wholly-owned by UMW, incorporated a wholly-owned subsidiary known as UMW Sher (L) Ltd. (“UMW Sher”) in Wilayah Persekutuan Labuan. The intended principal activity of UMW Sher is to provide contract drilling and engineering services for the oil and gas industry and leasing of drilling rigs and vessels. The initial issued and paid-up capital is USD1.00.

On 13th November 2007, WSP Holdings Limited (“WSP Holdings”), a 30.6%-owned associated company of UMW, made a public filing of its registration statement on Form F-1 with the U.S. Securities and Exchange Commission, relating to an initial public offering of American Depositary Shares (“ADS”) representing ordinary shares. The ADS were listed on the New York Stock Exchange on 6th December 2007 (New York Time). The effective shareholding of UMW in WSP Holdings was diluted from the original 30.60% to 22.95% on 11th December 2007 and was further diluted to 22.30% on 9th January 2008 due to the issuance of new WSP Holdings shares, pursuant to the listing of ADS and the exercise of the over-allotment option by the underwriters, respectively. The above listing was ratified by UMW shareholders at an Extraordinary General Meeting (“EGM”) held on 4th February 2008.

*The intended principal activity of PFP Shenzhen is the import and export of piping materials.