UEM targets double-digit growth in profit, revenue

Its healthcare and infrastructure divisions are likely to continue driving the group’s performance

by NG MIN SHEN / pic by RAZAK GHAZALI

UEM Edgenta Bhd is envisioned to achieve double-digit growth in both revenue and net profit for the financial year ending Dec 31, 2019 (FY19), on the back of expected contract wins, margin expansion and operational efficiencies.

MD and CEO Datuk Azmir Merican said the asset management and infrastructure solutions company will be “very happy” as long as it sustains double-digit profit growth in FY19.

The group’s net profit fell 64.6% to RM148.24 million in FY18 from RM418.19 million the year before, although this was due to a one-off gain on disposal of RM274.91 million recorded in FY17.

Excluding the one-off gain, the group’s net profit was 27% higher year-on-year in FY18.

“Profit growth may not be as spectacular this year, but even if it’s not as high as 2018, we will be happy to have double-digit growth.

“Revenue last year didn’t grow as much as we thought it would and we feel that we need to have stronger revenue growth, that’s why our target (this year) is double-digit growth,” Azmir told reporters after the group’s AGM in Petaling Jaya yesterday.

FY18 revenue was 2.9% higher at RM2.18 billion versus RM2.12 billion the year prior, as lower contribution from the consultancy segment was offset by higher revenue across the board.

Its healthcare and infrastructure divisions, which comprise about 86% and 87% of group revenue and profit respectively, are likely to continue driving the group’s performance this year.

Azmir said the group currently has work-in-hand valued at RM13.4 billion, of which the contracts for its healthcare sector can last for five years, while contracts for other segments can carry the group for 20 years.

“We’re bidding and also in direct negotiations for more contracts, so the pipeline is healthy for our businesses. As we go along in 2019, we will use up some of these, but we feel we can replenish the workin-hand,” he said.

The group’s healthcare services footprint includes Malaysia, Taiwan, Singapore and India.

It is also actively seeking to expand beyond southern India, where it already operates, into the northern part of the country.

“We’re bidding for jobs in India, where we manage about 150 hospitals. We started out mainly delivering housekeeping services, but we’re now going into the north for biomedical equipment management.

“We see potential in this because it’s less labour intensive and not many people are offering such service,” Azmir said.

Meanwhile, the group’s management consultancy business, which was hit by the deferment of infrastructure projects after the 14th General Election, is expected to move positively this year once government policies on mega projects are clearly defined.

“Once there’s clarity on the direction of some of these big projects, then we will know what to do and how to target them. We also hope that we’ll be able to bid for and win more projects,” Azmir said.

The group’s unit, Opus Consultants (M) Sdn Bhd, last month was named as the project management consultant for the RM11 billion Sarawak Coastal Road Network and Second Trunk Roads project. It was awarded the first package of the project worth RM50 million to work with the Sarawak Public Works Department in providing overall project management and technical expertise.