Group consolidated revenue increased by 3.4% to RM11.8 billion
Group consolidated profit before taxation surged by 18.6% to RM741.2 million
Manufacturing & Engineering segment’s revenue increased by 26% while profit before taxation more than doubled to RM60.9 million as Aerospace business turned profitable
KUALA LUMPUR, 27 February 2020 – UMW Holdings Berhad today reported an increase in its consolidated revenue and profit for financial year 2019; as the Aerospace business turned profitable during the year. Performance was further boosted by higher sales in the Automotive, Auto-Components and Lubricants businesses; as well as strategic cost optimisation initiatives.
UMW Holdings Berhad President & Group CEO, Badrul Feisal bin Abdul Rahim said, “UMW understands that we have a responsibility to our stakeholders to optimize returns from the prevailing economic cycle. Amidst a challenging business environment in 2019, the Group took decisive actions to improve the competitiveness of our businesses.”
In the Automotive segment, efforts to improve the competitiveness of UMW Toyota Motor include expansion of model line-up, which resulted in an increased market share of 11.6% in 2019. The higher number of vehicles sold led to a revenue growth of 3.9% to RM9,295.9 million. PBT however, declined by 3.6% to RM530.3 million, mainly due to higher depreciation expenses from its Bukit Raja Plant, which commenced operations in late 2018. For 2020, UMW plans to further expand its model line-up, with higher localisation.
The Aerospace business, which is a key part of UMW’s broader strategic shift into High Value Manufacturing turned profitable in 2019, after commencing commercial production in late 2017. Furthermore, higher sales of auto-components and lubricants also contributed to the 26% increase in M&E segment’s revenue to RM1,062.5 million in 2019. PBT more than doubled to RM60.9 million, supported by improved margins from cost optimisation efforts. Moving forward, the segment will continue to build in-house capabilities and enhance its position in the High Value Manufacturing sector.
The Equipment segment’s revenue declined by 8.5% to RM1,408.2 million, while PBT narrowed to RM135.7 million due to sluggish demand in both the Heavy and Industrial sub-segments. However, UMW is confident that the expansion of its leasing business model, will contribute to improved performance in the long run.
The year 2019 also saw UMW successfully monetise its assets and generate higher returns for shareholders via the sale of its industrial land bank in Shah Alam. The monetisation will further enable the Group to deleverage its balance sheet and fund capital expenditure for the Equipment and M&E businesses in 2020.
UMW has declared a final dividend of 2.0 sen per share amounting to RM23.4 million in respect of the financial year ended 31 December 2019.