Shah Alam, 25 May 2011 – The UMW Group announced today that its Group profit before taxation for the first quarter ended 31 March 2011 of RM339.5 million outperformed the RM305.1 million registered in the same quarter of 2010 by 11.3% or RM34.4 million. Higher revenue coupled with favourable foreign exchange rates mainly contributed to the higher profit before taxation.
As a result of the above, net profit attributable to the owners of the Company for the first quarter of 2011 increased from RM132.9 million registered in the same quarter of 2010 to RM151.8 million, an increase of RM18.9 million or 14.2%. Group revenue of RM3,221.2 million for the first quarter ended 31 March 2011 surpassed the RM3,033.2 million achieved in the preceding year’s corresponding quarter by RM188.0 million or 6.2%. Improved sales registered by all business segments of the Group, particularly the Equipment segment, resulted in the revenue growth.
Total Toyota and Perodua vehicle sales of 73,466 units represented 46.4% of the Total Industry Volume of 158,433 units reported by the Malaysian Automotive Association for the quarter ended 31 March 2011.
Group profit before taxation of RM339.5 million for the first quarter ended 31 March 2011 was RM114.8 million or 51.1% higher than the RM224.7 million recorded in the fourth quarter of 2010. This was because the fourth quarter results had reflected impairment losses provided on some of the Group’s assets and investments.
However, Group revenue of RM3,221.2 million for the first quarter ended 31 March 2011 was lower than the RM3,438.1 million registered in the fourth quarter of 2010 by RM216.9 million or 6.3%. Lower sales of Toyota vehicles, automotive components and some of the Group’s Oil & Gas products and services, resulted in the reduction in revenue for the first quarter.
Moving forward
Production of both Toyota and Perodua vehicles in the second quarter of 2011 is expected to slow down due to disruptions in parts supplies as a result of the recent earthquake and tsunami in Japan. As automotive parts makers in Japan are now scheduling to resume production earlier than expected, it is possible that production of Toyota and Perodua vehicles can be ramped up in the second half of 2011 to levels sufficient to cover the earlier shortfall. Perodua is maintaining its full-year sales target of 195,000 units and plans to roll out a new model soon to replace its top seller, MyVi.
Supply of Komatsu, Toyota and Mitsubishi equipment for the month of April 2011 was delayed. However, this delay is likely to be temporary as production is expected to resume to normalcy within the next few months. UMW’s Board is optimistic that the Group would most likely be able to meet its delivery commitments for the whole year.
Datuk Syed Hisham bin Syed Wazir, President and Group CEO of UMW said, “The recent earthquake and tsunami in Japan are affecting our second quarter automotive parts sales volume in India and Malaysia. However, impact on the 2011 revenue and earnings targets of our Manufacturing & Engineering Segment is not expected to be material as full recovery within the next few months is highly probable”.
Performance of the Group’s Oil & Gas Segment is expected to continue to improve for the rest of the year in view of the following:
– UMW’s premium jack-up rig, Naga 3, has secured a drilling contract from Petronas Carigali Sdn. Bhd. with an estimated value of USD41.5 million for the first year and the option to renew in Year 2 and Year 3. Naga 3 has been income-generating since March 2011.
– Both Naga 1, a semi-submersible rig and Naga 2, a premium jack-up rig, will continue to generate income for the remaining period of the year.
– United Seamless Tubulaar Private Limited’s new OCTG plant in India is on track to increase its plant capacity utilisation.
– The performance of its overseas associate, WSP Holdings Limited, has shown some improvement.
UMW’s Board is of the view that the financial performance for the second quarter of 2011 will be affected by the recent earthquake and tsunami in Japan. However, barring unforeseen circumstances, full recovery from this temporary set-back is possible in the second half of 2011.
