KUALA LUMPUR, June 25 — UMW Holdings Bhd is taking a two-pronged approach — ensuring sufficient revenue support as well as embarking on cost reduction and optimisation activities, to mitigate the impact of Covid-19 on its operations.
Acting president and group chief executive officer Azmin Che Yusoff said the group’s revenue support would be driven by three core business segments, namely automotive, equipment as well as manufacturing and engineering (M&E).
The automotive segment is implementing innovative sales and after-sales campaigns via online platform, coupled with attractive financing packages.
As for the M&E segment, UMW is capitalising on the recent approval for 24-hour operations at its facility to ramp up production of fan cases for Rolls-Royce, while sustaining export sales for KYB-UMW Malaysia Sdn Bhd’s shock absorbers.
Under the equipment segment, UMW is working closely with its principals by extending promotional packages to support customers affected by Covid-19.
“Against the backdrop of unprecedented challenging business environment, UMW has set in place measures to mitigate the adverse effects of a dampened business outlook and weak private consumption.
“The group is also actively looking into revenue elevation initiatives, increasing sales across sectors, strategically widening our international footprint, and strengthening operating efficiencies and profitability,” Azmin said in a statement today.
He said the group is aggressively pursuing further cost containment and optimisation initiatives such as reviewing, reducing and optimising operational expenditures, while working on deferral of non-critical operational and capital expenditures.
UMW is also improving its inventory management and optimising its production capacity, while ensuring consistent engagement with customers, principals and original equipment manufacturers.
“The group, supported by a strong financial position, will also focus on managing strong cash flow controls, while enhancing and redeploying existing resources to remain resilient.
“We believe that these initiatives, coupled with the government’s stimulus measures to buffer impact from the pandemic, will allow UMW to continue to deliver sustainable shareholder value and build profitability,” he added.
In 2019, UMW’s net profit surged by 32 per cent to RM454.44 million, on the back of higher revenue of RM11.74 billion.
“During the year, for the first time in the history of UMW, we controlled more than half of the market share in Malaysia’s automotive industry,” said Azmin.
Toyota and Perodua collectively garnered 51.4 per cent of market share.
The year 2019 also saw Perodua recording the highest ever sales in its 26-year history.
UMW’s M&E segment exceeded revenue of RM1 billion for the first time, supported by the aerospace business, which registered its maiden profit. It also monetised its asset via the sale of industrial land in Shah Alam.
Meanwhile, the company registered a lower net profit of RM44.31 million in its first quarter ended March 31, 2020 from RM86.5 million in the corresponding period a year ago.
Revenue decreased to RM2.11 billion compared to RM2.77 billion in the same period previously due to disruptions caused by the Covid-19 pandemic, which had led to lower sales in the automotive and equipment businesses. — Bernama
