KUALA LUMPUR: UEM Edgenta Bhd is looking to expand its healthcare support and infrastructure services segments in Indonesia in the next two years.
Managing director and chief executive officer Datuk Azmir Merican believes Indonesia has vast opportunity to leverage on UEM Edgenta’s services backed by its presence there for the past four years.
The Indonesian market contributes about five per cent to UEM Edgenta’s revenue. This is mainly from Cikampek-Palimanan highway maintenance via a partnership with Astra group.
“The market is huge in Indonesia for highways and hospitals compared to Malaysia. If we could get a slice of the market, it would be good, although we could not quantify it now,” he said at a briefing here today.
Azmir said the company would promote its technology-enabled solutions namely the road asset management system (RAMS) and pavement research centre to sustain its growth.
RAMS is UEM Edgenta’s in-house system to manage and monitor infrastructure mainly highways.
It allows the company to digitise its operations (workforce) and thus increase productivity (40-50 per cent) and reduce manpower and maintenance cost while automating the work with realtime to improve services delivery on the ground.
Azmir said the group’s ordebook stood at RM13.2 billion as at December 31 2019 that will give earnings visibility until 2038.
The bulk of the contracts was mainly secured from the infrastructure services (50 per cent), healthcare support (30 per cent) and the remaining for the property and facility solutions and asset consultancy.
UEM Edgenta remains cautious of its outlook for the short-term on the back of adverse macroeconomic conditions, exacerbated by the threat of the global coronavirus outbreak.
As such, Azmir said this year will be a year of resilience through operational and organisational excellence to sustain the company's profit margins.
“The Covid-19 will have an impact this year. The outlook is tough. But for companies like us with a proven track record of delivering growth, stable and defensive industry, we will survive,” he added.
He said the outlook for healthcare support and infrastructure services would be positive this year, with the property and facility solutions being the engine growth.
“2020 will be a challenging and tough year for the whole country given the Covid-19 outbreak. I do not expect it to be a positive year (for us). (But) we believe the company is resilient as we have gone through a lot of challenges,” he said.
Chief financial officer Muhammad Noor Abd Aziz said the current situation will likely cause companies to adopt a “wait and see” approach.
“Our business partners are now taking a bit of wait and see approach. For the last few months we have engaged with six ministries such as the Ministry of Health, Ministry of Work and a few more, but with the change in the government we need to restart our engagement,” he said.
UEM Edgenta’s net profit surged 43.56 per cent to RM97.49 million in the fourth quarter ended December 31, 2019, from RM67.91 million previously.
UEM Edgenta, Southeast Asia’s leading asset management and infrastructure solutions company, said its revenue rose 10.02 per cent to RM 712.26 million from RM647.35 million a year ago.
For the full-year, the group’s net profit edged up to RM188.0 million from RM152.4 million in 2018, while revenue rose to RM2.41 billion from RM 2.18 billion previously.