UEM Edgenta: We’ll fill the gap
> CEO believes sale of Opus International Consultants will not affect profitability
PETALING JAYA: UEM Edgenta Bhd, which sold its stake in Opus International Consultants Ltd (OIC) last year, does not expect the absence of OIC’s contribution to affect its profitability.
“Last year we grew by 30% in top line. Our focus this year is still to grow top line. It may not be as high as 30% but we will grow it more moderately. We’ve taken OIC out, so our target is to not let the sale of OIC impact our profits. We want to hold the same level of profits as when we had OIC,” said its managing director and CEO Datuk Azmir Merican.
“For 2018, our target is same level of profitability and in 2019, it’s to grow beyond what we had when we still had the investment in OIC. I think those are ambitious (targets) because OIC did contribute a lot to our bottom line and top line, it did contribute about 12% of our bottom line. Our idea now is that we can fill in the gap even without OIC,” he told reporters at its AGM yesterday.
For the financial year ended Dec 31, 2017, the group’s revenue grew 34.2% to RM2.12 billion from RM1.58 billion a year ago while net profit jumped 833% to RM434.8 million from RM46.6 million due to a one-off gain on disposal of RM274.9 million from the sale of stake in OIC.
Chairman Amir Hamzah Azizan said the group will focus on growing its core businesses namely infrastructure, healthcare and real estate, especially with the integration of UEMS Pte Ltd and KFM Holdings Sdn Bhd.
“We think UEMS and KFM will be able to fill up the gap that came from the sale of OIC,” he said.
He said the group’s order book comprises essential or required services such as road maintenance for highway operators and maintenance services for hospitals.
“Whether highway operators can choose or not, they still have to do road maintenance and because we are one of the biggest infrastructure guys that does that (road maintenance), we will continue to enjoy that.
“The type of order book that we have is essential so it is realiseable order book. It is good in that sense,” he added.
As at Dec 31, 2017, the group’s work in hand amounted to RM13.9 billion, which will last the group till 2038.
In terms of capital expenditure, Azmir said it has allocated RM100 million this year, of which RM40 million will be used for automation and mechanisation.
He said the group successfully applied technology-enabled solutions in hospitals and building management, which resulted in 20-30% cost improvements.
Commenting on the change in government, Amir said the group does not expect any impact due to the nature of its business, which are essential services. He said the transition in government would not change the need for these services.
“The most important thing to remember is, as a country we have gone through a good process. Elections are part and parcel of business. It went through well. At the moment, they are running through their processes, so let them run their processes,” he added.