UEM Edgenta expects to end FY18 stronger

For UEM Edgenta, the 4Q is usually our strongest quarter, according to its MD

By NG MIN SHEN / Pic By MUHD AMIN NAHARUL

UEM Edgenta Bhd is confident in maintaining a positive streak in topline and bottomline growth for the financial year ending Dec 31, 2018 (FY18), after recording a strong financial performance in the first half of 2018 (1H18).

Its MD and CEO Datuk Azmir Merican (picture) said the group expects to sustain the growth momentum for the rest of FY18 by fulfilling all of the contracts it has secured to date, while acquiring new revenue opportunities domestically and overseas, and further ramping up its operational efficiency initiatives to improve margins.

“Whatever you see (in 1H18) should be quite repeatable at the minimum. For UEM Edgenta, the fourth quarter (4Q) is usually our strongest quarter, so 2H18 could even be slightly better. Our target is to deliver a sustainable performance for FY18,” he told reporters at a briefing on the group’s 1H18 results in Kuala Lumpur yesterday.

The group, which had earlier announced that it would achieve higher revenue and earnings this year, currently has work-in-hand valued at RM13.5 billion, of which some are concession-based jobs with tenures ranging from five years to over 10 years.

UEM Edgenta’s healthcare and infrastructure sectors — including consultancy — comprise 29% and 67% respectively of the secured work-in-hand.

For the rest of this year, the total asset solutions player’s performance will continue to be driven by the healthcare and infrastructure segments, which together contribute about 80% to the group’s topline and bottomline.

“We are also working on securing several other sizeable energy performance contracts for a mix of education and industrial facilities in Malaysia, as well as more healthcare facilities in Singapore and Taiwan as part of our overseas expansion strategy,” Azmir said.

The group’s net profit rose 15.2% to RM62.96 million in 1H18 from RM54.66 million posted the year before, while revenue increased 8.8% to RM1.01 billion from RM925.34 million a year ago.

The improved performance was mainly driven by the group’s core sectors of healthcare, infrastructure and real estate.

In recent months, it bagged contracts worth S$39.3 million (RM117.5 million) for healthcare portering and housekeeping services at three hospitals in Singapore and two hospitals in Taiwan.

It also secured some RM47.2 million worth of integrated facilities management and energy performance contracts in the real estate sector.

Meanwhile, Azmir said the solutions provider will not be affected by the delay in the construction of the Pan Borneo Highway in Sabah.

The group’s consultancy division, which contributes about 10% to group financials, is contracted to provide technical support services, as well as an independent checking engineer for the highway.

“It’s not a very material part of our revenue and profit, so we will be able to make up for any loss of the contract. So, we’re positive that this will not have an impact,” Azmir stated, adding that any decision made by the government is out of the company’s hands.

Prime Minister Tun Dr Mahathir Mohamad announced on Monday that the government would be investigating the delay in construction of the highway, into which large amounts of money have been channelled.

Shares of UEM Edgenta closed three sen, or 1.35% lower, at RM2.20 yesterday, giving it a market capitalisation of RM1.86 billion. The stock saw 55,000 shares traded.