UMW plans RM1.3b capex

SHAH ALAM: Diversified group UMW Holdings Bhd plans to spend RM1.3 billion on capital expenditure (capex) this year, of which RM300 million will be invested in its automotive division, while the remainning in its other business units.

The group aims to maintain a 47 per cent share of the industry's total car sales achieved last year.

UMW, which is one of the country's largest automotive groups, also has businesses in oil and gas, industrial equipment (heavy machinery, industrial, marine and power) and manufacturing (lubricants products) sectors.

UMW president and group chief executive officer Datuk Syed Hisham Syed Wazir said a portion of the RM1.3 billion will be from internally generated funds while the rest from bank borrowings.

"This capex is for various activities such as plant expansion, upgrading machinery and its automotive division. However, this expenditure will not include the planned listing of our oil and gas division," Syed Hisham said at a briefing on the group's 2012 financial performance here yesterday.

On its automotive division, Syed Hisham said UMW is targeting to maintain a sales target of 47 per cent, or 300,000 units of Malaysia's total industry volume of 627,753 units last year.

The 300,000 units consist of Toyota models such as the Avanza, Camry and Vios, Hilux and the luxury Lexus brand, as well as Perodua vehicles such as the MyVi, Viva and Alza. Together, they contribute some 72 per cent to its RM15.8 billion revenue last year.

UMW owns a 38 per cent stake in associate company, Perusahaan Otomobil Kedua Sdn Bhd.

"The division is expected to continue to perform well with the introduction of new models and we hope to at least maintain our market share at 47 per cent and expect to sustain profitability due to better cost management and increased parts sales."

He said UMW will also be launching new models this year, but declined to reveal from which make or category.

On its oil and gas segment, Syed Hisham said UMW has received a Letter of Award from Shell for the supply of single combo top tension riser for Malikai Project valued at US$140 million (RM434 million).

Commissioning of the new coating plant in China, higher capacity utilisation for its automotive component plants in India and lubricant plant in China, as well as increased sales of Repsol and Pennzoil lubricant products are also expected to augur well for its earnings.

Toyota is the largest non-national car company in Malaysia with a market share of 17 per cent after Proton Holdings Bhd (22 per cent) and Perodua (30.1 per cent).

For the fourth quarter ended December 2012, the company made a net profit of RM207.6 million compared with RM84 million in the comparable quarter a year ago.

For the full year 2012, it made a net profit of RM951 million against RM485.5 million in the year before, while revenue climbed to RM15.8 billion from RM13.5 billion.