UEM Edgenta’s growth strategy

Managing director and CEO Syahrunizam Samsudin (pic) said the group’s plans to move away from a concession-based business model into commercial businesses remained intact.

PETALING JAYA: UEM Edgenta Bhd is aiming for an annual revenue growth of 12% for the next five years, driven by its healthcare segment, new market expansion and digitalisation.

Managing director and CEO Syahrunizam Samsudin (pic) said the group’s plans to move away from a concession-based business model into commercial businesses remained intact.

“Our aim is to achieve 50:50 contribution from concession and commercial businesses,” he told reporters at a briefing yesterday.

He said the group has been focusing on its healthcare business since the outbreak of the Covid-19 pandemic and it is estimated that the digitalisation of the healthcare sector would be accelerated in the coming years, at about 15% compounded annual growth rate in the Asia-Pacific.

“The diversification will also involve us going into new markets such as Saudi Arabia and push our healthcare business forward,” he added.

Towards this end, Syahrunizam said UEM Edgenta is working with the Health Ministry for a digitalised home quarantine management system that would include e-bracelets for Covid-19 patients in categories one and two.

UEM Edgenta logoUEM Edgenta logo

The group was also involved in the construction of eight Field Hybrid Intensive Care Unit facilities and Covid-19 business solutions focusing on workplace safety and health.

The initiatives are part of UEM Edgenta’s transformation strategy, namely the Edgenta of the Future 2025 (EoTF25), which features a fundamental shift towards a highly sustainable and future-proof business model.

EoTF25 focuses on three pillars – diversifying markets, driving cost efficiency and disrupting the industry with new products and services.

In April, UEM entered into a memorandum of business exploration with Asma Advanced Solutions LLC to identify strategies to capture healthcare support services and integrated facility management markets in Saudi Arabia.

“I believe Saudi Arabia is going to be an important market for us because it offers the growth in healthcare technology,” Syahrunizam said, adding that a team would be dispatched to assess, carry out site audits and meet with stakeholders.

Currently, UEM Edgenta has expanded its facilities management services in Singapore, where it is managing 11 public hospitals, and in Taiwan, where it operates more than 75% of the country’s government public health facilities.

In Malaysia, UEM Edgenta is the leading healthcare facilities management provider, servicing private hospitals such as Prince Court Medical Centre, Pantai Hospital Kuala Lumpur, Gleneagles Penang and Assunta Hospital.

Prince Court MedicalPrince Court Medical

For the first half of this year, UEM Edgenta’s healthcare business earnings surged 64% year-on-year to RM46.2mil on the back of a 13.3% growth in revenue to RM954.7mil.

Under EoTF25, Syahrunizam said UEM Edgenta is targeting to save RM100mil from operational and cost efficiency in the next five years, which will be ploughed back for the group’s digitalisation effort.

It recently launched a digital ecosystem dubbed Edgenta NXT that would drive the group’s next phase of growth through new products and market expansion.

“Tech-enabled platforms such as digital healthcare, infrastructure and smart-facilities management solutions spearheaded by Edgenta NXT will drive new revenue streams and transform our value proposition in the integrated facilities management and healthcare space,” he said.

He added that UEM Edgenta plans to resume dividend payment in the financial year 2021, while continuing to enhance shareholder value and future-proof the group through its EoTF25 initiatives.

The group will be maintaining its dividend policy of between 50% and 80% payout ratio based on profit after tax and non-controlling interests, which was adopted in 2018.

For the second quarter ended June 30, UEM Edgenta posted a net profit of RM6.13mil compared to a net loss of RM26.91mil a year ago, on the back of higher revenue growth of 20% to RM538.6mil. For the six-month period, net profit came in at RM12.83mil versus a net loss of RM15.76mil a year ago.

The group has an orderbook of RM11.6bil, of which RM7.2bil is concession maintenance works for PLUS highways until 2038.

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