by AFIQ AZIZ / Pic by MUHD AMIN NAHARUL
UEM Edgenta Bhd is looking to reposition its business activities by gearing itself towards healthcare support services during the pandemic due to higher demand.
The company’s net profit for its financial year ended Dec 31, 2020 (FY20), shrank to RM13.46 million from RM181.78 million the year prior partly due to lower revenue contribution from its infrastructure division.
The sharp decline was also attributed to a RM50 million impairment of completed property inventories under its property development division.
This is despite the company’s success in securing key contracts in healthcare support commercial business worth over RM900 million in Malaysia, Singapore and Taiwan, which accounted for 65% of all new contracts secured in FY20.
The revenue contribution from its healthcare division rose by 13% to 61% last year, compared to only 48% in 2019.
UEM Edgenta MD and CEO Syahrunizam Samsudin said the viability of the company’s prospects in healthcare support and infrastructure will be underpinned by its upcoming technology solutions.
“The impact of the pandemic last year on our diversified businesses in the region has been carefully studied, serving us with more knowledge and clear data sets to remain agile and responsive.
“In this new operating environment, we will reposition our business and grow sustainably to achieve our value creation promise through clear and differentiated solutions offered to the market,” he said in an online press conference yesterday.
Syahrunizam said the company’s vision to grow in the healthcare support, technology and infrastructure segments in the next five years is outlined under its newly launched “Edgenta of the Future 2025” plan.
The plan, which will allow the company to save an estimated RM100 million from operational costs, sets the mechanism for UEM Edgenta to transform into a technology-enabled solutions company with a focus in healthcare.
Syahrunizam said the company is looking to invest more than RM40 million of capital expenditure (capex) in digitalisation.
According to UEM Edgenta’s 2019 financial report, its total capex stood at RM110.7 million with RM80.36 million allocated for its property, plant and equipment, while the remaining was for the cost of intangible assets.
“Based on the 2019 capex, on an estimated basis, about half of that will be going to digitalisation. This means we will be seriously focusing on building our digital platforms,” Syahrunizam said.
He added that UEM Edgenta’s future technology offerings in the integrated facilities management (IFM) sector will be designed based on proven solutions, which have already been implemented in its healthcare support businesses operating in Singapore and Taiwan.
Syahrunizam said these offerings are expected to feature strongly in supporting the company’s foray into new markets, particularly in the Middle East, in which UEM Edgenta is aiming to secure partnerships with reputable local IFM players in the healthcare industry.
The company is currently present in Dubai, through Operon Middle East Ltd, a subsidiary of UEM Edgenta’s property and facility solutions division.
The company’s orderbook currently stands at RM12.2 billion, with RM1.4 billion being new orders secured in 2020. Of the total, 92% of commercial are driven by mechanisation and technology.
UEM Edgenta CFO Hillary Chua Pei Sum said the company has a strong balance sheet with total assets of RM2.9 billion and a net cash position of RM206 million as of FY20, attributed to healthy collections from its key customers in the fourth quarter, including the Health Ministry.
“With a gross gearing ratio of 0.32 time, this would mean the company has plenty of room to use as a leverage for future business growth,” she said.