UEM Edgenta sees up to 30% order book growth in FY22, backed by healthcare support service, international segments

KUALA LUMPUR (Feb 25): Asset management and infrastructure solutions company UEM Edgenta Bhd expects to secure up to 30% more new jobs in FY22, as it sees growth opportunities in the healthcare support services segment and international markets where it has a presence as the global economy continues to recover.

“We continue to be very optimistic on both our healthcare and international segments. We are looking at a 20% to 30% increase in terms of new order book wins in 2022,” its chief strategy officer Rais Imran told the press after the virtual briefing for UEM Edgenta’s fourth quarter (4QFY21) and full-year financial performance (FY21).

To recap, the group has secured about RM1 billion worth of new jobs for the financial year ended Dec 31, 2021 (FY21), of which 70% is from healthcare support services (RM705 million), and the remaining portion from property and facility solutions (RM133 million), infra services (RM80 million) and asset consultancy (RM113 million).

As at Dec 31, 2021, the group has an outstanding order book of RM10.8 billion, with the infra services being the largest component at 65.6% or RM7.1 billion, followed by healthcare support at 27.8% (RM3.01 billion), property and facility solutions at 4.1% (RM448.2 million) and asset consultancy at 2.4% (RM274.1 million).

“We have secured RM10.8 billion in our order book currently. If we look at the [components] of our order book, a large amount of the order book is still very much related to some of the concession businesses or the long-term contracts that we had secured in the past.

“This would allow us to drive sustainable cash flow generation in the business and to be able to continue to help us with our 50% to 80% dividend policy commitment as we had promised, based on the mandate that we [have obtained] from our shareholders,” Rais added.

Meanwhile, Rais shared that the group has an appetite for mergers and acquisitions (M&A) given its low gearing position. The group is looking to expand further in inorganic ways, in particular in the healthcare and technology sectors, which allows it to enhance its capabilities and complement its business offering.

“In terms of markets, [we are looking at] where we can double up our presence through an M&A and through an inorganic strategy that will help us expedite our market reach and gain market share in those markets. That’s basically how we’re thinking about our M&A strategy, where we see growth and margins in the future,” he added.

The group’s gross gearing stood at 0.29 times with a net cash of RM167.8 million as at end-Dec 31 last year.

UEM Edgenta’s net profit for the full FY21 jumped more than three times or 229.52% to RM42.4 million from RM12.87 million in FY20, while revenue rose 13.04% to RM2.29 billion from RM2.03 billion, its filing with Bursa showed.

Its chief financial officer Hillary Chua said the higher revenue in FY21 was mainly driven by higher payments from and maintenance works for PLUS Malaysia Bhd (PLUS) and Public Works Department (JKR) Selangor; new Covid-19 related businesses such as hybrid intensive care units (ICU) and e-bracelets, coupled with higher other billable works for the Ministry of Health for healthcare concession and the commencement of new projects in Singapore and Taiwan.  

Excluding the one-off items, Chua said the group’s normalised net profit stood at RM57.7 million in FY21, higher than the RM45.5 million posted in FY20, driven by higher revenue and lower operating expenditure (OPEX), in line with its cost optimisation initiatives, and higher share of results from associates.

Its net profit for the fourth quarter ended Dec 31, 2021 (4QFY21), however, fell 57% to RM20.43 million from RM47.67 million in the previous year’s corresponding quarter, due to higher operational costs from its healthcare support division, as well as lower revenue contribution from its asset consultancy division.

It also incurred a one-off staff rationalisation cost of RM12.6 million under its infrastructure solutions segment.

These factors had offset the 17% year-on-year increase in revenue for the quarter to RM699.22 million, amid improved contributions from both its asset management and infrastructure solutions businesses.

UEM Edgenta declared an interim dividend of three sen per share for FY21, payable on May 19.

Shares of UEM Edgenta closed down one sen or 0.63% to RM1.57, giving it a market capitalisation of RM1.31 billion.