KUALA LUMPUR: The three-month tax holiday period ending in September is driving up sales at UMW Holdings Bhd .
Revenue contribution from the group’s automotive business jumped 5.4% to RM2.38bil in the second quarter ended June 30, as consumers took advantage of the GST-free period to purchase new cars. New models launched during the quarter boosted demand, the company said in a filing with Bursa Malaysia today.
Profit before tax rose from RM99mil to RM142.4mil.
UMW said the improved performance by its automotive business was attributed to better performance from an associate company and improved profit margin due to the strengthening of the ringgit.
“The reintroduction of Sales and Service Tax on Sept 1 is expected to impact the consumer demand in vehicles sales,” it said.
UMW Holdings owns the assembly and distribution franchise of Toyota vehicles in Malaysia, as well as a 38% stake in Perodua. Earlier this year, UMW Holdings made an offer to takeover MBM Resources Bhd in a bid to increase its stake in Perodua.
As it is, automotive business accounted for more than 80% of UMW Holdings's revenue, with equipment and manufacturing operations making up the rest. The company had disposed its oil and gas business last year.
UMW Holdings posted a profit before taxation from continuing operations of RM301.3mil in the current quarter, which was substantially higher than the RM48.3mil registered in the same quarter last year.