UEM Edgenta mulls dividend payouts
This comes after shareholders approve plan to sell New Zealand subsidiary
PETALING JAYA: UEM Edgenta Bhd is considering a one-off dividend payout after shareholders approved its plan to sell a subsidiary in New Zealand for cash, even as the company seeks to strengthen its balance sheet.
The sale of its 61.2% stake in Opus International Consultants Ltd (OIC) will generate gross proceeds of RM532.8mil.
UEM Edgenta has set aside about RM415mil to pare down its debts, leaving it with around RM110mil cash, which is currently earmarked for future working capital.
“We will look into it after the completion of the disposal.
‘“It is something the board is considering,” managing director-cum-CEO Datuk Azmir Merican said when asked by reporters on the possibility of a special dividend payout.
“For now, our focus is to strengthen our balance sheet,” he said after the company’s shareholders’ meeting yesterday.
Azmir said that in financial year 2016, OIC contributed about 40% of UEM Edgenta’s revenue and 8% of net profit.
“Following the disposal of OIC, we will focus on streamlining our operations and drive organic growth by reallocating our resources in three core areas, namely, healthcare, infrastructure and real estate,” he said.
“We believe that we can achieve the revenue and profit gap from disposing OIC in a few years,” he added.
UEM Edgenta had acquired two businesses in the past years to grow its footprint and carve a niche in the asset-management business.
In December 2015, it acquired an 80% stake in integrated facilities management services company KFM Holdings Sdn Bhd for RM128mil.
And in September 2016, it bought Singapore-based facilities management company UEMS Pte Ltd (through the acquisition of Asia Integrated Facility Solutions Pte Ltd or AIFS) for S$185.9mil (RM563mil).
UEMS presently services about 90 hospitals and healthcare institutions in Singapore, Taiwan and Malaysia, with a total of 26,000 beds.
In Malaysia, UEMS services the private healthcare and hospital segments such as the Prince Court Medical Centre, Pantai Hospital Kuala Lumpur, Gleneagles Penang and Assunta Hospital.
Azmir said that about half of UEM Edgenta’s revenue came from healthcare, while 35% was from infrastructure and 15% from real estate.
“The company will drive organic growth in the three core sectors by pursuing various key infrastructure projects, harnessing revenue synergies and cross-selling opportunities, which includes expanding service offerings,” he said.