UMW primed for stronger showing

The group has set aside a total of RM1.3 billion for capital expenditure this year to boost its vast operations.



UMW Holdings Bhd is anticipating a stronger showing this year as its
drilling operations and oilfield services and manufacturing and
engineering (M&E) activities move upscale.

UMW’s automotive
division is also expected to move forward, said its president and group
chief executive officer Datuk Syed Hisham Syed Wazir.

The group has set aside a total of RM1.3 billion for capital expenditure this year to boost its vast operations.

UMW,
via 51 per cent-owned UMW Toyota Motor Sdn Bhd, distributes the Toyota
marque that leads the non-national segment of the local automotive
market.

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Its 38 per cent associate company, Perusahaan Otomobil Kedua Sdn Bhd,
commands the lion’s share of the overall market, largely through the
Perodua Myvi and Viva models.

“The automotive division is expected to see a moderate increase in 2013 after a record year in 2012.

“This
year, we have allocated RM1.3 billion for our capital expenditure, of
which RM300 million will be invested in our automotive division to
ensure that we maintain our market share,” Syed Hisham told Business
Times.

UMW captured 47 per cent of total vehicle sales last year, thanks to its Perodua, Toyota and Lexus brands.

Syed Hisham said for this year, UMW Toyota is aiming to sell 105,500 cars while Perodua is targeting 194,000 units.

“We believe that the automotive industry will continue to grow despite the challenging market conditions,” he said.

UMW
is also involved in the trading of heavy and industrial equipment with
brands like Komatsu, Toyota, Case and Bomag; the provision of oil and
gas services with drilling and oil-field services as core offerings; and
the manufacturing of automotive parts and distribution of lubricants
like Pennzoil and Repsol.

For fiscal year 2012, UMW's pre-tax
profit rose 46.5 per cent, or RM635.2 million, to RM2 billion from a
year ago, driven by growth in its four core business segments.

The earnings growth mainly reflects UMW's strong market position and solid financial profile.

"We were fortunate to do well last year. For drilling rigs, all
four that we have are contracted and we expect this to contribute
positively to the group's earnings. We see huge potential in this area,"
Syed Hisham said.

For the M&E division, UMW is expanding its reach into the fast-growing markets in China and India, he said.