UMW at a glance. Taken private at RM 5.00 per share.

 

Analysts maintain cautious view on UMW Aerospace

Analysts maintain cautious view on UMW Aerospace
January 11, 2018, Thursday Sharon Kong, sharonkong@theborneopost.com


KUCHING: Analysts who recently visited UMW Holdings Bhd’s (UMW) Aerospace Rolls-Royce fan case manufacturing plant have left their cautious view unchanged due to the group’s mixed prospects.

As per UMW’s website, UMW Aerospace Sdn Bhd (UMW Aerospace) signed a 25 plus five year agreement with Rolls-Royce Plc (Rolls-Royce) on August 12, 2015 to manufacture and assemble fan cases for Rolls-Royce Trent 1000 and Trent 7000 aero engines, which power the Boeing 787 Dreamliner and Airbus A330 neo aircrafts.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) had factored in RM750 million capital expenditure (capex) allocated for the first 2.5 years.

According to Kenanga Research, UMW Aerospace has delivered 6 fan cases for 4Q17 and additionally, expects to ramp up its production to 80 fan cases for 2018 and 160 fan cases by 2019 before hitting full capacity of 250 fan cases by 2020.

“UMW Aerospace is expected to be profitable at 160 fan cases level in 2019 considering that some front-loaded investments need to be amortised.

“The full production capacity is in line with the full production capacity of Seletar Rolls-Royce engine assembly plant,” the research arm said.

Kenanga Research highlighted that UMW Aerospace expects to post double-digit revenue growth over the next five years.

“However, due to the stringent contract condition with Rolls-Royce, the company is unable to disclose the information regarding the average selling price or the costs breakdown for the fan cases.”

Based on the first nine months of 2017 (9M17) results, the manufacturing and engineering (M&E) segment posted pretax losses of RM13.2 million and Kenanga Research estimated that UMW Aerospace has incurred start-up losses of circa RM47.1 million. This is given that other business in M&E segment remained at the same level as of financial year 2016 (FY16).

The research arm thus factored in the start-up losses in FY17E reported net profit (NP) while maintaining FY17E CNP numbers.

Overall, Kenanga Research maintained its neutral stance on UMW in view of the single-digit growth in the group’s automotive segment sales volume pending the completion of its new Bukit Raja Plant (expected to be operational in early 2019, an additional 50,000 capacity (one-shift) to the current 75,000) and the gestation period for its Rolls-Royce plant (expected to break even in FY19).

“Moving forward, the group’s strategic exit from the oil and gas (O&G) industry is expected to improve the group’s profitability,” the research arm said.

“Furthermore, the automotive segment is expected to be driven by the new models namely 2018 Toyota C-HR completely built up (CBU), 2019 Toyota C-HR completely knocked down (CKD), 2018 Toyota Harrier, all-new Perodua MyVi and face-lifted variants of existing models.”


http://www.theborneopost.com/2018/01/11/analysts-maintain-cautious-view-on-umw-aerospace/

Loss arising from demerger drags UMW Holdings deeper into the red in 2Q

 

Tan Xue Ying/theedgemarkets.com
August 28, 2017 21:24 pm MYT

KUALA LUMPUR (Aug 28): UMW Holdings Bhd's quarterly net loss widened to RM209.3 million from RM12.13 million, dragged down by one-off losses arising from its demerger exercise of associate UMW Oil & Gas Corp Bhd (UMW-OG).

For the second quarter ended June 30, 2017 (2QFY17), the Group posted 2.54% growth in revenue, from RM2.72 billion to RM2.79 billion, mainly attributed to higher top line contribution from its automotive business segment.

Losses per share expanded to 17.92 sen from 1.04 sen in 2QFY16, according to the filing with Bursa Malaysia this evening.

UMW Holdings noted that for the first six-month period ended June 30 (1HFY17), UMW Holdings posted net loss of RM189.14 million, compared with a net profit of RM4.45 million in the previous corresponding period.

This is despite a 14.2% year-on-year revenue growth for the cumulative period, from RM4.83 billion to RM5.51 billion.

For the quarter under review, the group said in its bourse filing that while its automotive business segment enjoyed higher revenue due to the surge in demand for Toyota Innova and Fortuner models, margins were crimped by the higher cost of imports with the strengthening of the US dollar.

Its equipment segment delivered consistent revenue in the quarter, however with lower earnings seen amid squeezed margins.

The group's manufacturing and engineering segment was loss-making in 2QFY17, due to pre-operating expenses incurred for its aerospace business.

Losses at its unlisted oil & gas segment widened in 2QFY17 due to the lower revenue and redundancy expenses incurred on the cessation of drilling operations in Oman.

“As per our strategy, we have successfully completed the demerger within the said timeframe and the exit will provide the platform for the group to emerge as a stronger, more competitive industrial conglomerate with increased capacity for expansion.

“The demerger has resulted in reduced exposure to debt and a strengthened balance sheet, thus improving our financial position to enable new and accretive investments which will spur the growth of our core business segments moving forward”, said UMW Holdings' president and group chief executive officer, Badrul Feisal Abdul Rahim, in a statement.

He added that UMW Holdings’ overall performance will continue to be impacted by headwinds in the oil & gas sector until full completion of the exit plan, and gave assurance that there may be considerable milestones achieved by the end of the year.

On a more positive note, it said that UMW Toyota Motor is on track to achieve its full-year sales target of 70,000 units for 2017, and that its fan case project is progressing as per schedule and delivery is expected to commence in the final quarter of this year.

UMW Holdings’ share price has climbed 36% year to date, rising from the low of RM4.22 end-2016 to RM5.75 today with market capitalisation of RM6.65 billion.


http://www.theedgemarkets.com/article/loss-arising-demerger-drags-umw-holdings-deeper-red-2q

UMW's NAGA 4 rig is contracted to Petronas Carigali for 3 years, with an additional two year option for renewal

UMW Holdings bags US$157.68 million contract  
Business & Markets 2013  
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com     
Wednesday, 10 April 2013 18:51  
 
KUALA LUMPUR (April 10): UMW HOLDINGS BHD [] has entered into a contract with Petronas Carigali Sdn Bhd through its wholly-owned subsidiary UMW Standard Drilling Sdn Bhd for the provision of UMW’s jack-up drilling rig NAGA 4.

The contract is for Petronas Carigali’s domestic operations within the Malaysian waters, valued at US$157.68 million for performance of the scope of works as described in the contract.

According to an announcement to Bursa Malaysia, the contract is for a duration of three years, commencing from the date of the contract when NAGA 4 arrives at the mobilisation site, with an additional two year option for renewal.

“The contract is expected to contribute positively to the earnings and net assets of UMW for the financial year ending 31st December 2013 and beyond,” said the group in the announcement.

NAGA 4 is an independent leg cantilever 400 feet B Class mobile offshore self-elevating drilling unit, with a water depth and drilling depth of 400 feet and 30,000 feet, respectively.

UMW - Return on Retained Earnings

UMW
Year		DPS		EPS		Retained EPS
2002		4.3		24.6		20.3
2003		5.9		23.1		17.2
2004		7.2		16.5		9.3
2005		9.9		28		18.1
2006		13.7		30		16.3
2007		15.9		43.6		27.7
2008		30.3		51.8		21.5
2009		24.7		34.2		9.5
2010		24		45.7		21.7
2011		30		43.1	P	13.1
2012
Total		165.9		340.6		174.7
From	2002	to	2011
EPS increase (sen)				18.5
DPO				49%
Return on retained earnings				11%
(Figures are in sens)

UMW expects higher 2012 earnings

UMW expects higher 2012 earnings 2012/08/07 UMW Holdings Bhd, Malaysia’s biggest carmaker and assembler by market value, expects full-year profit to increase as auto sales climb and its oil and gas business rebounds from two years of losses. The company’s oil and gas business will be profitable this year as its drilling rigs and the trading of oilfield products and services contribute to revenue, Chief Executive Officer Syed Hisham Syed Wazir said. In 2011, UMW’s profit declined 4.7 percent to RM502.1 million (US$162 million), with the unit posting a RM229.6 million loss. “The worst is over for the division,” Syed Hisham, 58, said in an interview yesterday, declining to give a more specific target for earnings this year. “The scenario is very buoyant and opportunities are increasing.” The profit gain may help extend its 41 percent rally this year, the second-biggest gain among Southeast Asian automakers and assemblers and the most on Malaysia’s benchmark FTSE Bursa Malaysia KLCI Index. The improving outlook also drew foreign investors, who held 24 percent of the company in the second quarter from 16 percent in the previous three months, according to data compiled by UMW. Shares of the assembler of Toyota Motor Corp. cars have lagged behind the Malaysian index for the past three years. UMW fell 0.3 percent in 2011, compared with the benchmark measure’s 0.8 percent advance. The gains in the previous two years were also about half of the stock gauge. Of the 16 analysts who track the stock, 10 rate it a "buy" while five have a "hold", with one recommending investors to "sell". Reasonable Valuation “UMW has been a laggard,” said Choo Swee Kee, chief investment officer at TA Investment Management Bhd, who manages about RM700 million including UMW shares. “Even with this rise, the valuation is still reasonable compared to other index stocks,” he said, adding that the rally “is sustainable.” UMW shares trade at 13.2 times estimated earnings, compared with the KLCI Index’s multiple of 15.1, according to data compiled by Bloomberg. The oil and gas unit is expected to turn in a profit as it expands into the upstream business, Syed Hisham said, referring to exploration and production. The company is also seeking to ride on increased exploration activities by a state-run energy group, he said. The Selangor-based group, which derived 72 percent of sales last year from manufacturing and assembling cars for Toyota, also increased market share in the Southeast Asian nation’s auto market in the first half of the year. UMW’s share in the country’s passenger-car market rose to 48 percent at the end of June from 45 percent last year, Syed Hisham said, citing Malaysian Automotive Association’s data.-- Bloomberg

Investor's Checklist: Consumer Services

Most consumer services concepts fail in the long run, so any investment in a company in the speculative or aggressive growth stage of the business life cycle needs to be monitored more closely than the average stock investment.

Beware of stocks that have already priced in lofty growth expectations.  You can make money if you get in early enough, but you can also lose your shirt on the stock's rapid downslide.

The sector is rife with low switching costs.  Companies that establish store loyalty or store dependence are very attractive.  Tiffany's is a good example; it faces limited competition in the retail jewelery market.

Make sure to compare inventory and payables turns to determine which retailers are superior operators.  Companies that know what their customers want and how to exploit their negotiating power are more likely to make solid bets in the sector.

Keep an eye on those off-balance sheet obligations.   Many retailers have little or no debt on the books, but their overall financial health might not be that good.

Look for a buying opportunity when a solid company releases poor monthly or quarterly sales numbers.  Many investors overreact to one month's worth of bad same-store sales results, and the reason might just be bad weather or an overly difficult comparison to the prior-year period.  Focus on the fundamentals of the business and not the emotion of the stock.

Companies also tend to move in tandem when news comes out about the economy.  Look for a chance to pick up shares of a great retailer when the entire sector falls - keep that watch list handy.  


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey


Read also:
Investor's Checklist: A Guided Tour of the Market...

UMW (29.5.2012)

Announcement		Financial		Earning	Dividend	NTA (RM)	ttm-EPS	Quarter
Date		Quarter		Per Share (Cent)	(Cent)		(Cent)	Number
29/05/2012		31/03/2012		18.83	0	3.82	49	1
24/02/2012		31/12/2011		4.4	7.5	3.65	43.24	4
24/11/2011		30/09/2011		14.51	13.5	3.69	40.46	3
19/08/2011		30/06/2011		11.26	10	3.662	39.12	2
25/05/2011		31/03/2011		13.07	0	3.635	46.6	1
24/02/2011		31/12/2010		1.62	6.5	3.485	45.34	4
22/11/2010		30/09/2010		13.17	13.5	3.594	52.76	3
20/08/2010		30/06/2010		18.74	10	3.622	51.04	2
20/05/2010		31/03/2010		11.81	0	3.515		1
23/02/2010		31/12/2009		9.04	9	3.369		4
20/11/2009		30/09/2009		11.45	5	3.325		3

ttm-EPS  49 sen

LFY Dividend 31 sen

Price  RM 7.85

PE 16x

DY 3.95%

UMW advances following upgrade

Tuesday, 24 April 2012 15:59

KUALA LUMPUR (April 24): UMW HOLDINGS BHD [] shares advanced on Tuesday after Maybank Investment Bank Bhd Research upgraded the stock to a Buy from Hold and raised its target price to RM8.35 (from RM6.95).

“The disruption to the regional auto supply chain has abated while its O&G segment is at the cusp of a revival.

UMW now offers a recovery play angle with modest growth (3-year EPS CAGR of 20%) and undemanding valuations, supported by a decent dividend yield (6%),” it said.

http://www.theedgemalaysia.com/business-news.html?start=30

UMW

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
24-Nov-11		31-Dec-11		3	30-Sep-11		3,691,437		300,404		14.51		-
19-Aug-11		31-Dec-11		2	30-Jun-11		3,166,475		222,747		11.26		-
25-May-11		31-Dec-11		1	31-Mar-11		3,221,160		259,846		13.07		-
24-Feb-11		31-Dec-10		4	31-Dec-10		3,438,131		123,976		1.62		-

High Low Prices 1 Month 6.950   (08-Nov-11) 6.140   (23-Nov-11) Prices 3 Months 9.000   (02-Sep-11) 6.140   (23-Nov-11) Prices 12 Months 9.000   (02-Sep-11) 6.140   (23-Nov-11) Volume 12 Months 77,812   (11-Jul-11) 1,755   (11-Apr-11)

Selected Bursa counters 2 (COASTAL, DLady, GENM, Latexx, MBB, UMW)

UMW's new drive

UMW's new drive
By Zuraimi AbdullahPublished: 2011/02/10

UMW Holdings Bhd (4588)will consolidate and rationalise some of its core businesses to become leaner and meaner, its managing director Datuk Syed Hisham Syed Wazir said.

Consolidation is under way for its manufacturing and engineering and equipment divisions as UMW, among Malaysia's top five most admired companies according to the Asian Wall Street Journal, looks to leverage on its vast range of products and services.

The oil and gas (O&G) division may also be restructured, but Syed Hisham said UMW Oil & Gas Bhd's listing plan remains on the cards once it returns to profitability.

"We are looking at consolidating our businesses wherever possible so that UMW can become a strong and lean group. We should be able to leverage on the group's wide range of products and services in our international presence and also on the strength of each of our operations," Syed Hisham said in an interview to mark his first 100 days in Shah Alam, Selangor, recently.

"Right now, our operations are managed independently. Each SBU (strategic business unit) needs to help the others so that we can all reap maximum benefits. For example, we should be able to cross-sell our products and services effectively and achieve cost-savings through volume procurement of common items, etc," he added.

UMW's O&G division, which began in 2002, posted a net loss of RM48 million for the nine-month period ended September 30 last year.

This was due to the imposition of countervailing and anti-dumping duties by the US government on Chinese pipe importers.

The move had affected UMW group's major profit-contributing associate company, Wuxi Seamless Oil Pipe Co (WSP), Syed Hisham said.

However, WSP had secured new customers in world markets like Venezuela and should return to profit this year.

"Our O&G business segment has expanded rapidly since its establishment in 2002. I believe we need to take a good look at all our O&G businesses and see if we can restructure or rationalise some of our investments."

Syed Hisham said the group's jack-up rig Naga 2 was already working and will generate full-year revenue in 2011.

"We are now in negotiation stage with potential partners for the leasing of Naga 3 and we expect it to be in operation in the first quarter of 2011."

He added that its associate company in India, United Seamless Tubular Pte Ltd, had last August started commercial production of seamless pipes for the oil gas sector.

"This company will also be revenue-generating in 2011. The plant has a capacity of 300,000 metric tonnes per year," Syed Hisham said.

The year 2011 will also be a good year for its equipment business.


Read more: UMW's new drive http://www.btimes.com.my/Current_News/BTIMES/articles/biyou-2/Article/index_html#ixzz1DVPJ9FfG

A Brief Look at UMW

UMW Holdings Berhad

Business Description:
UMW Holdings Berhad (UMW) is a Malaysia-based company. UMW operates in four segments:

1. automotive; 
2. equipment, which supplies marine engine, material handling and compressed air equipment; 
3. manufacturing and engineering, which provides engineering solutions to automotive components, transportation, petrochemicals, oleochemicals, and oil and gas industries; 
4. oil and gas, and others. 

Its oil and gas segment includes five upstream activities: manufacture of oil country tubular goods and line pipes; oil and gas exploration operations; fabrication of oil and gas structures; provision of oilfield services, and supply of oilfield products. The operations of UMW are carried out in Malaysia, Australia, China, Hong Kong, India, Indonesia, Myanmar, Oman, Papua New Guinea, Singapore, Taiwan, Thailand, Turkmenistan and Vietnam. During the year ended December 31, 2009, UMW sold 248,521 units of Toyota and Perodua vehicles.

Current Price (7/1/2011): 7.61
2009 Sales 10,720,861,000
Employees: 10,000
Market Cap: 8,758,836,040
Shares Outstanding: 1,150,964,000
Closely Held Shares: 17,000

2004 DPS 7.2 EPS 16.5
2005 DPS 9.9 EPS 28.0
2006 DPS 13.7 EPS 30.0
2007 DPS 15.9 EPS 43.6
2008 DPS 30.3 EPS 51.8
2009 DPS 24.7 EPS 34.2
9M10 DPS 23.50 EPS 43.55 NTA 3.5939

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
22-Nov-10		31-Dec-10		3	30-Sep-10		3,087,276		262,199		13.17		-
20-Aug-10		31-Dec-10		2	30-Jun-10		3,282,075		342,994		18.74		-
20-May-10		31-Dec-10		1	31-Mar-10		3,033,157		232,268		11.81		-
23-Feb-10		31-Dec-09		4	31-Dec-09		2,969,431		169,967		9.04		-

Estimated EPS for 2010 = 43.55*4/3 = 58.07 sen
Projected PE for 2010 = 7.61 / 0.5807 = 13.1 x

Historical
5 Yr
PE range 10.4 - 15.4
DY range 5.1% - 3.5%

10 Yr
PE range 9.9 - 14.2
DY range 4.0% - 2.8%

Capital Changes

2003  2/3 Bonus

2008  1 to 2 Share Split

One Year Performance of Selected Stocks in KLSE (2)

UMW Holdings Berhad

Date announced 22/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK UMW C0DE  4588 

Price $ 6.8 Curr. ttm-PE 12.89 Curr. DY 2.94%
LFY Div 20.00 DPO ratio 59%
ROE 14.7% PBT Margin 11.0% PAT Margin 4.8%

Rec. qRev 3087276 q-q % chg -6% y-y% chq 10%
Rec qPbt 340922 q-q % chg -23% y-y% chq 18%
Rec. qEps 13.17 q-q % chg -30% y-y% chq 15%
ttm-Eps 52.76 q-q % chg 3% y-y% chq 49%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 12.00 Avg. L PE 8.00
Forecast High Pr 8.08 Forecast Low Pr 5.50 Recent Severe Low Pr 5.50
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 50% Downside 50%
One Year Appreciation Potential 4% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 10%

CPE/SPE 1.29 P/NTA 1.89 NTA 3.59 SPE 10.00 Rational Pr 5.28



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

UMW

Date announced 20/08/2010
Quarter 30/06/2010 Qtr 2
FYE 31/12/2010

STOCK UMW
C0DE  4588

Price $ 6.83 Curr. PE (ttm-Eps) 13.38 Curr. DY 2.93%
LFY Div 20.00 DPO ratio 59%
ROE 14.1% PBT Margin 13.5% PAT Margin 6.5%

Rec. qRev 3282075 q-q % chg 8% y-y% chq 27%
Rec qPbt 442266 q-q % chg 45% y-y% chq 138%
Rec. qEps 18.74 q-q % chg 59% y-y% chq 159%
ttm-Eps 51.04 q-q % chg 29% y-y% chq 34%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5%
Avg.H PE 12.00
Avg. L PE 8.00
Forecast High Pr 7.82
Forecast Low Pr 5.50
Recent Severe Low Pr 5.50
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 43% Downside 57%
One Year Appreciation Potential 3%; Avg. yield 6%
Avg.Total Annual Potential Return (over next 5 years) 9%

CPE/SPE 1.34
P/NTA 1.89
NTA 3.62
SPE 10.00
Rational Pr 5.10



Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

UMW (23.8.2010)

Visit this link for an analysis of latest earnings report from UMW
http://turtleinvestor888.blogspot.com/2010/08/my-one-laggard-pick-umwrm-641.html




If you look at the segmental results, the automotive segment is the real money spinner. It accounts for 96% of the pre-tax results.

UMW (23.8.2010)

Visit this link for an analysis of latest earnings report from UMW
http://turtleinvestor888.blogspot.com/2010/08/my-one-laggard-pick-umwrm-641.html

UMW 2Q net profit surges 166.6% to RM211m

UMW 2Q net profit surges 166.6% to RM211m
Tags: earnings | Perodua | Toyota | UMW Holdings

Written by Yong Min Wei
Friday, 20 August 2010 22:52


KUALA LUMPUR: UMW HOLDINGS BHD [] posted a strong set of earnings, reporting RM211.69 million in net profit for the second quarter ended June 30, 2010 (2Q10).

It said on Friday, Aug 20 that earnings jumped 166.6% from RM79.43 million a year ago due to higher sales of Toyota and Perodua vehicles and favourable model mix.

UMW said improved performance from the equipment and manufacturing & engineering segments coupled with favourable foreign exchange rates, accounted for the significant improvement in profit for the current quarter.

"Our overseas associate, WSP Holdings Ltd, has reported an overall improvement in both domestic and international sales and a lower loss for the second quarter of 2010," it said.

The 2Q revenue rose 27.2% to RM3.28 billion from RM2.58 billion a year ago while earnings per share were 18.74 sen versus 7.24 sen.

UMW declared an interim single-tier dividend of 20% or 10 sen per share for the year ending Dec 31, 2010 – totaling net dividend payable of about RM114.5 million – to be paid on Oct 7. The group's net asset per share stood at RM3.62 as at June 30.

For the six months ended June 30, 2010, net profit surged 137% to RM344.55 million from RM145.38 million while revenue grew 28.1% to RM6.31 billion from RM4.93 billion.

The group said strong economic recovery in the first half of 2010 resulted in higher demand for its Toyota vehicles, industrial and heavy equipment as well as automotive parts. However, it noted that the slow and weak rebound in the oil & gas industry has affected demand for some of its pipes and services.

UMW's share price on Aug 20 rose two sen to close at RM6.43 with 183,400 shares traded.

http://www.theedgemalaysia.com/business-news/172230-umw-2q-net-profit-surges-1666-to-rm211m.html

UMW clarifies oil&gas unit losses

2010/06/30

The UMW Group said it viewed the losses in its Oil & Gas Division as a temporary setback, as it has a number of greenfield projects which are expected to generate income and show positive results upon commencement of operations in the second half of this year.

As such, it considers a recent news article by a local paper quoting a source and referring to large losses or provisions for losses being required in its O&G unit, as not only inaccurate and baseless but misleading to investors.

In a statement, the group said the O&G Division suffered a loss of RM19.234 million in the first quarter, which was duly disclosed and reasons explained in an announcement on May 20, 2010.

The losses were attributed to 

• decreased drilling activities worldwide which resulted in a significant drop in demand for Oil Country Tubular Goods (OCTG), while 
• the countervailing and anti-dumping duties on seamless pipes made in China imposed by the United States, had affected the profitability of its associated company in the country.

UMW maintained that it has good corporate governance standards and transparent reporting methods.

However, the news article had implied that the group had incurred huge losses which had not been accounted for and which need provisions in the next few years.

"We view this as a baseless allegation as we were not able to provide our perspective or input on the matter," it added.

Meanwhile, the UMW Group is involved in four core businesses -

• Automotive, 
• Equipment, 
• Manufacturing and Engineering, and 
• Oil and Gas.

 -- Bernama

http://www.btimes.com.my/Current_News/BTIMES/articles/20100630120151/Article/index_html