Analyst Research Report Snapshot


Results Note – UMW (ADD, upgrade from REDUCE) - Within expectations, intense competition ahead




Affin Hwang Investment Bank Bhd


26 May 2014





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1QFY14 Results inline with expectations The Group’s 1QFY14 revenue increased 6.7% yoy to RM3,583m, driven by higher sales of motor vehicles and oil and gas drilling services. The improvement in the automotive segment was led by a +6.7% yoy increased in sales of Toyota vehicles (Vios and Altis full model change), while Perodua sales improved 6% yoy (Alza and new MyVi). Separately, the oil and gas segment improved with (1) full contribution from NAGA 4 which commenced operations on April 2013; (2) higher daily operating rates for NAGA 2; and (3) higher operating days for NAGA1. However, despite a higher Group PATAMI which rose +8.9% yoy to RM239.3m, core net profit declined 6.2% due to exceptional items of RM23.7m (gains from foreign exchange, derivatives, disposal on investments and properties, etc). Excluding EIs, 1QFY14 core net profit of RM216m is however inline with our full year earnings estimates, accounting for 23% of both Affin's and consensus. 1QFY14 EBIT margin was slightly weaker yoy (-0.4ppts) as margins were affected across all business segments except for the engineering and manufacturing division, which improved 27ppts yoy.

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