BUSINESS

UMW POSTS NET LOSS OF RM47.9 MLN IN Q3

30/11/2021 05:37 PM

KUALA LUMPUR, Nov 29 -- UMW Holdings Bhd recorded a net loss of RM47.9 million in the third quarter (Q3) ended Sept 30, 2021 from a net profit of RM83.87 million in the corresponding period in 2020. 

Revenue decreased to RM2.02 billion from RM2.66 billion previously, mainly due to lower sales in the automotive as well as manufacturing and engineering segments during the quarter, where only certain operations of the group were allowed to operate with limited capacity with the easing of the movement restrictions from Aug 16, 2021, under the National Recovery Plan (NRP).

“Automotive segment recorded revenue of RM1.59 billion, 25.2 per cent lower than the RM2.13 billion reported in the corresponding quarter, mainly due to a lower volume of vehicles sold in the current quarter, resulting from the FMCO (full movement control order) and the resumption of businesses from Aug 16, 2021 with limited capacity, coupled with the ongoing shortage of semiconductor chips,” it said in a filing with Bursa Malaysia today.

On the current prospects of the automotive segment, the company said it is ramping up production to meet the encouraging outstanding order book.

“Demand for automotive products is expected to continue to remain strong following the extension of the sales tax exemption.

“Although the group has managed to mitigate the impact of semiconductor chips shortage for the year, however, the group will continue to work closely with the principals and suppliers to secure a consistent supply of semiconductor chips in the medium to longer term.

“Introduction of new models, including the hybrid electric vehicles, as well as the year-end sales promotion are expected to drive stronger sales in the final quarter of the year,” it said. 

UMW said the prospects for auto components and lubricants sub-segments are gradually improving as disruptions to the supply chain have progressively eased and businesses have started to ramp up production.

“In addition, the demand for the replacement equipment (RE) market will also continue to improve in line with the recovery of the automotive industry.

“The aerospace sub-segment is expected to benefit from the gradual reopening of international travel and the demand for the fan cases is expected to increase from 2022 onwards,” it said. 

The group expects the business environment to continue to remain challenging for the remainder of the year and will continue to manage the negative impact of the COVID-19 pandemic on its operations.

-- BERNAMA


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