By Sharina Ahmad
ASSET management and infrastructure solutions company UEM Edgenta Bhd aims to expand its presence in the Indonesian market mainly in healthcare and infrastructure sectors in the next two years.
Outgoing managing director and CEO Datuk Azmir Merican said that given the company’s existing footprint in Indonesia via its partnership with Astra Group, the company believes it has huge potential to grow further.
“We have been there (Indonesia) in the last four years. What we are looking at is nearer to home and the population is one of the interesting factors,” he said during the company’s briefing on March 10.
To date, Indonesia’s market contributes some 5% to UEM Edgenta’s revenue mainly from Cikampek-Palimanan highway maintenance via a partnership with Astra Group (which is part of the Trans-Java toll road).
“The market is huge in Indonesia for highways and hospitals as compared to Malaysia. If we could get a slice of the market, it would be good although we could not quantify it now,” said Azmir.
He said the company would promote its technology-enabled solutions namely the road asset management system (RAMS) and pavement research centre to sustain its growth.
This will help the company to digitise its workforce operation (productivity increase 40%-50%) and reduce manpower and (reduce maintenance cost) automate the work in real time to improve services delivering on the ground.
Due to the Covid-19 outbreak, Azmir said the company will remain cautious of its outlook for the short term on the back of the adverse macroeconomic.
“Covid-19 will have an impact this year. The outlook is tough. But for a company like us with a proven track record of delivering growth, stable and defensive industry, we will be good to survive,” he added.
He said the outlook for healthcare support and infrastructure services would be positive this year and the property and facility solutions will be the engine growth.
“2020 will be a challenging and tough year for the whole country given the Covid-19 outbreak.
“But, I do not expect it to be a positive year. We believe the company is resilient as we have gone through a lot of challenges,” he said.
Asked on the FY20 financial performance, chief financial officer Muhammad Noor Abd Aziz said on the current situation with Covid-19 outbreak, the business will have “wait and see” approach.
“Even our business partners are now taking a bit of ‘wait and see’ attitude. 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 changes in the government we need to restart our engagement. These are engagements that we have planned earlier,” he said.
Muhammad Noor added that the contracts secured worth of RM13.2 bil will give it earnings visibility until 2038.
The contracts were mainly from the infrastructure service (50%) and healthcare support (30%), and the remaining are for the property and facility solutions and assets consultancy.
UEM Edgenta’s net profit surged 43.56% to RM97.49 mil in the fourth quarter ended Dec 31, 2019 from RM67.91 mil previously.
For the full year, the group’s net profit edged up to RM188 mil from RM152.4 mil in 2018 while revenue rose to RM2.41 bil from RM2.18 bil previously. – March 10, 2020
