UEM Edgenta’s FY17-18F earnings forecasts revised upwards
KUALA LUMPUR: UEM Edgenta Bhd’s (UEM Edgenta) financial year 2017-2018 forecasts (FY17-18F) for earnings have been revised upwards by analysts, post the group’s earnings announcement for the first nine months of FY17 (9MFY17).
In a press release, UEM Edgenta announced that the group recorded profit after tax and noncontrolling interest of RM93.4 million for 9MFY17, which was 46.9 per cent higher compared to last year, mainly due to better performance from all three services divisions.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), UEM Edgenta’s 9MFY17 earnings was above its estimates of RM114.3 million at 81 per cent of full-year earnings.
“Post earnings announcement, we are revising our FY17-18F earnings forecasts upwards by 10 per cent and 23 per cent to RM125.8 million and RM100.2 million respectively as we expect earnings going forward to be supported by organic growth in various business segments and lower costs arising from a more efficient and productive operations across business segments,” MIDF Research said.
Post earnings revision, MIDF Research in turn upgraded its recommendation on UEM Edgenta to ‘buy’ from ‘neutral’ previously.
Despite the fact that Opus International Consultant (OIC) will cease to be a part of UEM Edgenta in FY18, the research arm noted that most of the group’s business segments have started turning around and new acquisitions such as AIFS and KFM are starting to contribute more significantly to the group’s revenue.
“In addition, we are more positive on its asset consultancy business in Malaysia post-OIC which will remain focused on delivery of major road and infrastructure projects in both Peninsular and East Malaysia,” the research arm said.
“The Malaysian consultancy business is also more stable unlike its overseas counterpart in Australia and Canada.”
Furthermore, the research arm opined that UEM Edgenta’s effort to grow the group’s healthcare services business organically via AIFS and the new healthcare budget announced for Malaysia and Healthcare 2020 Masterplan in Singapore will bode well for the company going forward.