UEM Edgenta to enhance its dividend policy to at least 50% and up to 80% dividend payout ratio
KUALA LUMPUR, 10 May – UEM Edgenta Berhad (“UEM Edgenta” or “Company”) had in its 55th Annual General Meeting held today, unveiled an enhanced dividend policy of at least 50% and up to 80% dividend payout ratio based on PATANCI, representing an increase as compared to the previous policy’s payout ratio of up to 70%. The enhanced policy comes on the back of UEM Edgenta’s businesses in its core sectors of Healthcare, Infrastructure and Real Estate. With its clear focus, net cash position and robust dividend policy, it aims to drive high performance to continuously deliver sustainable returns for its shareholders.
The financial year ended 2017 (“FY17”) was a year of streamlining for UEM Edgenta, following the disposal of Opus International Consultants Limited (“OIC”) which was completed in December 2017. The disposal, which was conducted at an attractive price, streamlined business strategy and bolstered UEM Edgenta’s financial position by unlocking the value of its investment, with total cash proceeds of RM463 million and a one-off gain on disposal of RM274.9 million.
Commenting on the Company’s achievements in FY17 on the sidelines of UEM Edgenta’s 55th Annual General Meeting, Managing Director/Chief Executive Officer Dato’ Azmir Merican commented, “We are pleased to have achieved a profit after tax and non-controlling interest (“PATANCI”) of RM418.2 million, including the one-off gain on disposal of OIC. We were able to declare bumper dividends of 31 sen per share which is our highest payout to-date. For clarity, sale of OIC did not include Opus International (M) Berhad (“OIM”) which is involved in asset development and project management and has a strategic role and competitive position in the infrastructure space as part of UEM Edgenta. OIM is one of the main consultants supporting the Project Delivery Partner (“PDP”) for the Pan Borneo Highway Sabah and is also the Independent Checking Engineer for Pan Borneo Highway Sarawak.”
During the financial year, significant work was also conducted on integration of the companies which were acquired in FY16, UEMS Pte Ltd (“UEMS”) and KFM Holdings Sdn Bhd (“KFM”). UEMS, a new growth engine for UEM Edgenta’s Healthcare Services Division which provides international growth platforms in Singapore and Taiwan, contributed to the doubling of the Division’s revenue from RM435 million in FY16 to RM913 million in FY17. UEMS’ revenue grew 15% year-on-year (from SGD124.7 million to SGD142.9 million in FY17) on the back of new commercial contracts secured. As for KFM, it reported a strong revenue contribution of 63% to the Real Estate Services Division in its first full year of integration. KFM increases the Company’s value proposition in the Real Estate sector, with its focus on high performance green building capabilities.
Operating in sectors which enjoys high public and private spending, UEM Edgenta simultaneously provides the assurance of a defensive and reliable business married with exciting growth prospects. The Company benefits from being in the stable Healthcare Services business where the concession from the Ministry of Health provides long term stability of income while UEMS provides the impetus for commercial growth. Similarly, UEM Edgenta’s business in the Infrastructure sector also provides a stable base for revenue generation, on the back of a promising industry outlook.
UEM Edgenta is also committed to further improve its operational and cost efficiencies by adopting technology to yield improved margins, and has successfully applied technology-enabled solutions in hospitals, as well as building management which have shown 20-30% cost improvements.
Dato’ Azmir added, “Backed by resilient and stable earnings as well as growth in all our business divisions supported by our project pipeline, with positive outlook in the related sectors, we expect to continue to deliver correlating dividend payouts and sustainable returns to shareholders. With our defensive business strategy and growth prospects, we want to offer predictability in terms of shareholders’ returns.”