UEM Edgenta targets more healthcare jobs in India

This article first appeared in The Edge Financial Daily, on May 16, 2019.
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PETALING JAYA: UEM Edgenta Bhd is tendering for more jobs in India’s healthcare sector as it sees good growth prospects and less competition. The integrated facilities management provider currently operates in India’s healthcare sector via a joint venture, managing the country’s largest private hospital chain, Apollo Hospitals Group.

“We currently manage 150 hospitals in India,” the group’s managing director and chief executive officer Datuk Azmir Merican (pic) told the media after its annual general meeting yesterday.

“We started with delivering housekeeping services, so we had a lot of workers. But in the last two to three years, we have moved into biomedical management which is less labour-intensive and there is less competition, so we see potential for growth for us in this space,” Azmir said. He said the group’s work in hand stood at RM13.4 billion as at Dec 31, 2018, with 65% contributed by its infrastructure services segment, 28% by healthcare, and the rest by the property solution and consultancy segment.

“These jobs can last [for] between five and 20 years, though we are continuously seeking more in Malaysia and around the region,” he added, saying the group also intends to increase its market share in Singapore’s healthcare sector. Azmir said for the financial year ending Dec 31, 2019 (FY19), UEM Edgenta will be spending over RM80 million on capital expenditure to enhance its technology offering over the next three years.

Performance-wise, Azmir said he is positive that the group can record a double-digit growth in profit for FY19, which is expected to be contributed by more work secured as well as improving organisational efficiency that will help improve margins.

“Continuous improvements through [the] Lean programme have already been implemented and are driving further organisational and operational excellence, enabling us to offer our clients new automated and mechanised solutions for their businesses,” he said. Azmir added that his optimism is further premised on a 22% growth in profit after tax recorded for FY18, driven by improvements realised through group-wide efficiency and lower financing cost.

For FY18, UEM Edgenta recorded a net profit of RM152 million against RM434 million for FY17. Excluding the discontinued operation following the disposal of Opus International, the group’s net profit for continuing operations in FY17 would be RM125 million, marking a 22% difference.

“We hope to maintain this growth momentum this year. Our revenue growth of 3% last year was not as strong as we liked it to be, so we will also look at strengthening that through more jobs secured,” he said.

UEM Edgenta’s share price has risen some 27% over the past one year. It closed one sen lower at RM2.72 yesterday, with a market capitalisation of RM2.26 billion.