SHAH ALAM: UMW Holdings Bhd is looking to diversify its revenue streams in the current financial year ending Dec 31, 2015 to reduce its dependency on the automotive segment.
Chairman Tan Sri Asmat Kamaludin said for the financial year ended Dec 31, 2014, the automotive segment contributed about 80% towards total group revenue, driven by high sales of Perodua cars.
"We are currently in talks with several partners on the diversification plan and will make the announcement at the appropriate time," he told reporters after the group's AGM here yesterday.
He said the group would either extend its current four segments – automotive, equipment, oil and gas (O&G), and manufacturing and engineering– or venture into new businesses.
Asmat said with the automotive segment facing a lot of competition, it was not healthy for it to contribute 80% to total revenue.
"If the automotive business continues to do well, we don't want to reduce anything, in fact we want to grow the automotive business. But if you rely only on one sector and that sector goes through a difficult time, you'll have nothing to go back to.
“We have revised downwards our sales target for Toyota vehicles this year from about 103,000 units sold in 2014 to around 90,000 units,” he said, adding the sales target for Perodua, however, would be higher this year.
For the O&G segment, he said, the group was currently trying to manage it as best it could amid the uncertain global oil prices.
“We have contracts (for O&G projects), but the major companies that we are providing such services to are also facing difficulties (due to lower oil prices), and are looking at renegotiating some of their chartered rates.
“It (the O&G segment) will not be as good as last year, but I am confident that it will be satisfactory.
“I'm not saying that we made a mistake venturing into the O&G segment. It was good at that time, and I’m sure that oil prices will go up again,” he added.
He said the group’s manufacturing and engineering division remained profitable despite its relatively small contribution to total group revenue.
“Currently, we are focusing on auto components and lubricants for the division.
“We are planning to grow the lubricant business (this year)," he added. – Bernama