PETALING JAYA: UMW Holdings Bhd, the exclusive distributor of Toyota vehicles, plans to launch a pipeline of new car models this year to mitigate the impact of the market slowdown.
The automotive, equipment and manufacturing conglomerate said yesterday that despite the subdued market environment, it was cautiously optimistic of improving demand from customers post-MCO.
UMW said it expected the group’s automotive segment to benefit from the recent announcement of 100% sales tax exemption on completely knocked down vehicles and 50% exemption for completely built-up vehicles effective from June 15 to Dec 31 this year.
UMW saw its net profit fall 48.8% to RM44.3mil for the first quarter ended March 31,2020, from RM86.5mil in the corresponding quarter last year in tandem with lower revenue.
Consequently, its earnings per share fell to 3.79 sen from 7.40 sen previously.
During the quarter in review, UMW’s group revenue fell 23.8% to RM2.12bil from RM2.78bil in the previous corresponding quarter.
“The decrease in revenue was mainly due to lower sales in the automotive and equipment businesses, following disruptions caused by the Covid-19 pandemic, ” said UMW.
For the quarter, revenue from its automotive segment fell 35% year-on-year (y-o-y) to RM1.59bil, mainly due to a lower number of vehicles sold. Pre-tax profit from the segment fell 53.3% y-o-y.
Revenue from its equipment segment fell 11.8% y-o-y to RM289.2mil, while pre-tax profit fell 5.5% y-o-y to RM25.8mil, due to disruptions caused by the Covid-19 pandemic.
For the remaining part of the year, UMW acting president and group CEO Azmin Che Yusoff said the group would strive to maintain its performance in 2020 despite the unprecedented challenging business environment.
“We will continue to focus on strengthening our core business segments and strategic cost optimisation initiatives to improve our business performance and operational productivity, ” he said.
UMW’s shares fell 14 sen to close at RM2.65 yesterday.
