This article first appeared in The Edge Financial Daily on February 21, 2018

KUALA LUMPUR: UEM Edgenta Bhd announced a special dividend of 18 sen per share — together with a second interim dividend of five sen per share in respect of its financial year 2017 — after its fourth-quarter net profit jumped about 20 times following the disposal of its entire stake in Opus International Consultants Ltd (OIC) last year.

Its net profit for the fourth quarter ended Dec 31, 2017 (4QFY17) surged to RM324.81 million from RM16.49 million a year earlier, after booking a gain of RM274.91 million from the disposal of its 61.2% stake in OIC, held via indirect wholly-owned unit, Opus International (NZ) Ltd. The disposal was completed in December.

The special dividend is payable on April 18, and the second interim dividend on May 17. The total payout of 23 sen, in respect of its FY17, brings its full-year payout to 31 sen — its highest dividend payout so far — versus seven sen in FY16.

“The declaration of this special dividend and [the] second interim dividend is in line with our commitment to return excess cash from the disposal of OIC, and we will continue this commitment of rewarding our shareholders,” UEM Edgenta managing director and chief executive officer Datuk Azmir Merican said in a statement.

Excluding the discontinued operations where the disposal gain was parked, its net profit rose 15% year-on-year (y-o-y) to RM54.07 million from RM47.16 million, UEM Edgenta’s Bursa Malaysia filing yesterday showed.

For the full FY17, UEM Edgenta’s net profit spiked 422% y-o-y to RM418.19 million from RM80.06 million. Revenue grew 34% y-o-y to RM2.12 billion from RM1.58 billion.

However, its pre-tax profit for FY17 was lower at RM172.9 million compared with RM181.5 million in FY16, due to higher interest expense incurred for its Murabahah term facility and sukuk, and higher amortisation of intangible assets.

Its consultancy division posted lower pre-tax profit contribution, due to works requiring external consultants which resulted in full revenue pass through. This was partly offset by higher contribution from the healthcare services and infra services divisions.

The group said it began 2018 on a strong financial footing with a stronger balance sheet and lower gearing following the disposal of OIC, and is now focused on its three core operations — consultancy, services and solutions in healthcare, infrastructure and real estate sectors.

“Moving forward, in FY18, UEM Edgenta expects to continue delivering strong dividend payout and return to shareholders. This will be backed by its strong and stable earnings as well as growth in all of its business divisions,” the group’s statement said.

It also said it will continue focusing on operational excellence initiatives to drive better margins and profitability as well as to realise synergies from its acquisitions, and deploy technology-based enablers to its customers.

UEM Edgenta shares closed unchanged at RM2.34 yesterday, with a market capitalisation of RM1.95 billion.