KUALA LUMPUR, March 3 (Bernama) -- UMW Holdings Berhad’s (“Group”) profit after taxation and zakat (“PATZ”) surged by 80.6% to RM380.3 million for the fourth quarter ended 31 December 2021 (“4Q 2021”), compared with the RM210.6 million registered in the corresponding quarter ended 31 December 2020 (“corresponding quarter”). This was supported by the strong contribution from its Automotive and Equipment segments as demand recovered after the lifting of the Full Movement Control Order (“FMCO”). The Group’s revenue increased by 12.4% to RM3,645.1 million compared with the corresponding quarter mainly due to higher vehicle and equipment sales.
For the financial year ended 31 December 2021, the Group’s revenue increased by 15.8% to RM11,060.8 million compared with 2020. PATZ improved by 59.7% to RM515.6 million in 2021 compared with RM322.9 million in 2020 in line with the increase in revenue as well as recognition of deferred tax assets arising from approval of an incentive approved in 4Q 2021.
In view of the encouraging performance, UMW has declared a higher dividend of 5.8 sen per share in respect of the financial year ended 31 December 2021 compared with 4.0 sen in 2020.
Automotive segment
Buoyed by the higher number of vehicles sold which was driven by the sales tax exemption as well as the introduction of new models, the Automotive segment’s revenue for 4Q 2021 increased by 14.7% to RM3,061.6 million compared with the corresponding quarter. In line with the higher revenue and higher share of profits from an associated company, the segment’s profit before taxation and zakat (“PBTZ”) surged by 40.9% to RM269.2 million. Consistent with the expected strong rebound in the economy in 2022 with a GDP forecast of between 5.5% and 6.5%, the Malaysian Automotive Association projected the total industry volume (“TIV”) to increase by 18% to 600,000 units mainly driven by the extension of sales tax exemption until 30 June 2022, improving consumer confidence as well as the low interest rate environment. The introduction of all-new and facelift models is expected to drive sales and contribute positively to the Group in 2022.
Equipment segment
The Equipment segment’s revenue increased by 14.8% to RM365.1 million in 4Q 2021 as demand for the segment’s products and services in the local and overseas markets continues to improve following business recovery from the Covid-19 pandemic. This, in turn, resulted in the segment’s PBTZ to improve by 56.4% to RM28.9 million for the quarter. Moving forward, the Heavy Equipment sub-segment could benefit from the expected increase in construction activities following the reopening of the economy, while the Industrial Equipment sub-segment’s performance is projected to improve as it continues to focus on the growth sectors.
Manufacturing & Engineering segment
The Manufacturing & Engineering segment’s revenue declined by 7.5% in 4Q 2021 as the Lubricants and Aerospace sub-segments registered lower sales. As a result, the segment recorded a lower PBTZ of RM11.7 million for the quarter. The projected strong growth in TIV in 2022 bodes well for the Auto Components sub-segment, while the Lubricants sub-segment will continue to expand its footprint in the industrial segment. The Aerospace sub-segment is continuously exploring opportunities to improve its plant utilisation in line with its products and end-customer diversification strategy. The sub-segment has been impacted by the Covid-19 pandemic and is expected to turn around as the industry recovers with the reopening of international borders.
Overall prospect
UMW Holdings Berhad’s President and Group CEO, Dato’ Ahmad Fuaad Kenali said, “Despite the challenges confronting the Group in 2021, from the semiconductor chips shortage to disruptions caused by the Covid-19 pandemic and massive flood affecting its operations, the Group remained resilient and delivered improved results compared with 2020. The Group expects business operations both domestically and regionally to gradually recover from 2022 onwards and will continuously assess its strategies as well as initiatives to improve its cost management and operational efficiency to enhance its resilience and to continue to deliver value to its shareholders.”
About UMW
The UMW Group is a regional conglomerate that develops industries, manages partnerships and facilitates growth. It is involved in four core business segments – Automotive, Equipment, Manufacturing & Engineering and Aerospace. The Group operates in 8 countries and has over 18,000 employees, including at Perodua.
Moving forward, UMW strives to play a leading role in shaping the future of its industries. The Company will do this by inspiring vibrant ideas, nurturing potential, pioneering partnerships and delivering excellence in everything it does; the rewards of which will contribute to the progress and well-being of all its stakeholders.
