UMW Holdings Bhd. reported slightly lower sales of lubricants and related products for the nine months ending Sept. 30, compared to the same period last year. The company expressed optimism that sales will gradually improve as the automotive industry recovers from the economic impacts of national lockdowns imposed in response to the COVID-19 pandemic.
The Malaysian company reported that its sales of lubricants and related products declined 3% to 114.9 million ringgit (U.S. $27.2 million) for the first three quarters, down from RM118.4 million last year. Within the company’s manufacturing and engineering segment, sales of lubes and related products were down 2% to RM119.5 million, compared with RM122.4 million in 2020.
UMW manufactures and assembles shock absorbers, motorcycle suspension units and hydraulic power steering pumps and systems for both original equipment manufacturers and replacement equipment manufacturer markets, exporting to more than 38 countries. The company offers its own in-house brand of lubricants, Granti. It also offers a range of research and development, blending and distribution services to other lubricant companies. UMW also has a subsidiary in China, Lubritech Ltd., which provides factory fill lubricants and distributes for Spanish lubricants brand Repsol.
“The prospects for auto components and lubricants sub-segments are gradually improving as
disruptions to the supply chain have progressively eased and businesses have started to ramp up production,” UMW stated in its third-quarter financial statement. “In addition, the demand for the replacement equipment market will also continue to improve in line with the recovery of the automotive industry.”
Although UMW doesn’t break out quarterly lubricant sales data, it did note that its manufacturing and engineering segment’s revenue declined by more than 50% in the third quarter as all three sub-segments – auto components, lubricants and aerospace – registered lower sales.
“The group expects the economic situation to remain challenging for the remainder of the year due to the COVID-19 pandemic,” Dato’ Ahmad Fuaad Kenali, UMW Holdings president and group CEO, said in the company’s earnings news release. “Nevertheless, the group will intensify efforts to improve its resilience through operational efficiencies and effective cost management, to continue to deliver value to its shareholders. In addition, the production and demand for the group’s products and services is improving following easing of the FMCO restrictions and the group is hopeful of a full recovery by next year.” The government instituted the Full Movement Control Orders, generally known as national lockdowns, for periods of time in 2020 and this year in response to rising numbers of COVID-19 cases.