UEM sees better profits this year


BY B.K. SIDHU

THE United Engineers (M) Bhd (UEM) group expects better profits this year as it continues to seek new opportunities both locally and abroad to grow its business.  

“Barring any unforeseen circumstances, this year’s profit should be better than last year’s,” the group’s new managing director and chief executive office, Ahmad Pardas Senin, told reporters at a briefing after just over 100 days in office. 

Last year, the UEM group chalked up a net profit of RM315mil with large contributions from its construction and property development activities. And its listed unit UEM World Bhdreported RM37mil in net profit for the first six months to June this year versus a RM101mil net loss a year ago.  

The UEM group, via its construction arm UEM Builders Bhd, currently has more than RM1bil of jobs on its order book. And Ahmad is confident the order book will increase to RM1.5bil given the many bids the company has submitted for construction and engineering jobs in Thailand, Indonesia, India and the Middle East. 

“The biggest challenge facing is not only to expand the order book but to see how much value we can retain by improving our efficiencies and systems,” he said. 

He added that the margins for foreign projects were thinner than local ones and UEM had to be very prudent in its forays abroad. He said the focus in future would be on getting jobs “closer to home.” 

Ahmad said the group wanted to explore opportunities in Indonesia in the pharmaceuticals and highway construction and management areas. He said UEM had vast experience in the design, construction, maintenance and management of expressways and this could be exported beyond Malaysia’s shores. 

The UEM group is now on a much stronger financial footing than three years ago, according to Ahmad. 

From RM30bil in September 2001, its total debts have been reduced to a manageable RM14.4bil now. It currently has cash balances of RM2.2bil compared with RM1.06bil previously; its shareholders’ funds have grown from negative RM1.9bil to a positive RM5.6bil; and it posted a net profit of RM315mil last year versus a RM2.3bil net loss two years earlier.  

A diversified group that is involved in 10 different sectors, UEM has 40 units and 10 listed companies. It has total assets of RM21bil and staff strength of 20,000 people. 

Since assuming office, Ahmad has realigned the group into four major sectors: UEM World, information and communications technology (ICT), expressways and investments. The thrust going forward is to grow these businesses, and although Ahmad has an action plan to drive the group ahead, he admitted there were challenges aplenty, 

“My action plan encompasses improving productivity and capital, assets and people resources; focusing on under-performing assets; doing the right things the right way; and working towards operational efficiency,” he said. 

“The way forward is about productivity, growth, dividend yields and shareholder returns,” he added. 

Ahmad identified Time Engineering Bhd and its unit TIME Dotcom Bhd, PLUS Expressways, UEM Environment, and UEM Land, which owns 16,000 acres of land in Bandar Nusajaya in Johor, as group companies that needed his immediate attention, as they were potential drivers of growth. 

For Time Engineering and Time dotCom, he said that apart from operational issues, there were structural matters that needed to be sorted out. 

As for the land bank in Johor, Ahmad did not discount selling some of it in the future, although he said UEM wanted to explore ways to work with other parties to develop the land. He said re-entering the water sector was an option, but he did not specify how. 

 UEMBLDR :  [Stock Watch]  [News]

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