Wednesday, May 15th, 2019

 

UEM Edgenta eyes double-digit growth

PETALING JAYA: UEM Edgenta Bhd is confident of achieving double-digit growth this year through continued focus on its healthcare and technology investment divisions, says managing director and CEO Datuk Azmir Merican.

He said a lot of work had been put in to make the organisation stronger and fitter to hunt, secure and deliver the jobs.

“We are also looking at how we can enhance our margins by applying our LEAN programme, which is to help build capabilities across the company via process improvements and training, as well as technology and innovation-centric programmes to tackle high-impact operational areas,” he told reporters after the company’s AGM today.

UEM Edgenta, which provides hospital support and highway maintenance services, recorded a 21.8% jump in after-tax profit from continuing operations to RM152.4 million for the financial year ended Dec 31, 2018, while revenue rose 3.3% to RM2.18 billion.

Azmir noted the healthcare support division would continue to be the company’s strongest growth engine as it strived to increase its market share in Singapore.

Meanwhile, in Taiwan, the Main Market-listed company is targeting growth by upselling new services to existing customers.

On the home front, he said, UEM Edgenta was strategically looking into cross-selling and capitalising on the synergies among its business divisions.

The group currently has RM13.1 billion worth of jobs in hand.

“For the healthcare business, we are looking at a five-year outlook while some of our other businesses will take longer, up to a 20-year outlook,” he said.

In the international market, for example, the company was actively seeking new jobs in India in biomedical equipment management, Azmir said.

He said the company’s revenue was mainly derived from the healthcare and infrastructure divisions but the consultancy division, which contributed about 5% last year, was expected to improve its contribution on the back of the government’s commitment to proceed with the Pan Borneo Highway project in Sabah and Sarawak.

“This will be further supported by the Klang Valley Double Tracking and the Sarawak Coastal Network and Second Trunk Road projects as well as potential new projects, with significant funds being set aside by the Federal and state governments of Sabah and Sarawak for development and infrastructure projects,” he added.


BIMB says OPR cut to have neutral impact on full-year earnings

KUALA LUMPUR: BIMB Holdings Bhd expects to be temporarily hit by the cut in the Overnight Policy Rate (OPR) last week, but foresees a neutral impact in its full-year earnings for 2019, helped by the boost in its fee-based income.

BIMB is seen by analysts to be one of the most affected banks in a falling interest rate climate due to its high mix of variable rate loans.

Speaking to reporters at its AGM here today, BIMB and Bank Islam Malaysia Bhd CEO Mohd Muazzam Mohamed (pix) said any other bank would be in the same situation as BIMB following the OPR cut, but noted that the effect will be temporary.

“When the OPR is lowered, we have to lower our base rate and base financing rate, so our income will be lower. At the same time, we also lower our deposit rate. However, there is a timing difference. For savings accounts, we can reduce (the rate) immediately. For deposits, only when it mature. It’s only that temporary period when the income is affected,” he explained.

Bank Islam has lowered its base rate and base financing rate by 26bps following the OPR cut. The bank’s base rate has been reduced to 3.77% per annum from 4.03%, while its base financing rate has been reduced to 6.72% per annum compared with 6.98% earlier.

“At the same time, there is also other sources of income that we expect to be better this year, for example, our fee-based income for Bank Islam. Our fee-based income in the past has been lower compared to industry average and we’re pushing that up,” said Muazzam.

In terms of fee-based income, he said areas like wealth management and bancatakaful will help to negate the impact from the OPR cut.

Under its strategic plan for 2020-2021, fee-based activity is seen as one of its key thrusts and it is hopeful that Bank Islam’s subsidiary BIMB Investment Management Bhd will be one of the growth areas for the group.

“We’ve got good products. Put in good sales infrastructure and we can grow from there,” Muazzam said.

He added that Bank Islam is also looking at bigger contribution from its bancatakaful arrangement with sister company Syarikat Takaful Malaysia Keluarga Bhd.

“We’ve added more products and we’ve increased marketing and sales channels with them,” said Muazzam.

This year, BIMB is looking at maintaining its return on equity (ROE) before tax at 15%. It posted an ROE after tax of 15.4% in 2018.

Meanwhile, Muazzam expects Bank Islam’s financing growth to moderate slightly to 6%-7% from 8.5% in the previous year, in view of the challenging economy and its larger loan size of RM46 billion now.

“At that level, it’s still going to be above the industry average but not at double-digit as where we were two to three years ago.”


Sapura Resources inks JV pact with S’pore firm

PETALING JAYA: Sapura Resources Bhd (SRB) has entered into a conditional subscription and joint venture (JV) agreement with Singapore-based MTU Asia Pte Ltd for the diversification into the sale and service of products, engines and parts, and provision of related value-added services.

According to SRB’s filing with Bursa Malaysia, SRB and its subsidiary SRB One Sdn Bhd along with MTU and its subsidiary MTU Power Systems Sdn Bhd (MPS) will collaborate to undertake the sale and service of original equipment packaging solutions in marine (both naval and commercial), rail, construction and industrial, mining, agriculture, oil and gas, and power generation market sectors in Malaysia.

This follows the memorandum of understanding entered between the parties in March.

MTU is part of the core business of Rolls-Royce Power Systems AG (RRPS), which is a division of Rolls-Royce plc. RRPS provides pioneering, integrated solutions for the marine and infrastructure sectors and focuses on digitalisation and electrification.

MPS will be appointed as the sole distributor of RRPS in Malaysia to, among others, sell and service certain products and parts stipulated in the distributor agreement.

The final shareholding structure of MPS shall consist of SRB One holding 51% equity, while MTU shall retain the remaining 49% stake in the JV company.

SRB anticipates that the proposed JV business may contribute 25% or more of its consolidated net profits in the near future and/or result in the diversion of 25% or more of the consolidated net assets.


German tax investigators swoop in ‘Offshore Leaks’ raids

BERLIN, May 15 — German investigators swooped on the homes of wealthy individuals and financial firms today in nationwide dawn raids, as part of a tax evasion investigation triggered by high-profile media leaks. Officials searched the homes of…


Grim China data, Italy woes smother global stocks recovery

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Land in Kelantan auctioned due to failure of developer, says PMBK

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RAN lease cessation to have minimal impact: Maxis CEO

KUALA LUMPUR: Maxis Bhd sees the cessation of the 3G radio access network (RAN) lease arrangement by U Mobile Sdn Bhd to have minimal impact on its 2019’s earnings before interest, taxes, depreciation and amortisation (ebitda).

CEO Gokhan Ogut said the group’s ebitdaI would see a single digit decline, but the performance overall, to remain solid.

“The impact (of RAN share exit) would be mitigated in stages by the performance of our core segments, which are the postpaid and prepaid, as well as growth of convergence or fibre,” he said after launching Maxis’ first concept store today.

To recap, the RAN share with Maxis infrastructure was initially slated to end by last December, but both operators agreed to extend the network sharing agreement by another three months for Peninsular Malaysia and by six months for Sabah and Sarawak.

Ogut also revealed that the mobile operator would be transforming its stores and adopt the new concept within the next two years.

“We will do it nationwide. However, some may be smaller scale stores,” he said.

Without disclosing the investment to be poured into the transformation, he said the strategy paralleled its new vision and convergence growth strategy.

“The new concept store is infused with new design language and cutting edge technology for a new level of personalised digital experience, and offers highly engaging, relevant and rewarding interactions for customers,” Ogut said.

The concept store is part of Maxis’ long term ambition, based on its ability to cater for an evolving digital lifestyle.

The store also demonstrates new capabilities and offerings for retail enterprise customers, driven by Maxis’ focus on helping Malaysian retailers go digital.


Tencent profit climbs as it emerges from gaming quagmire

HONG KONG, May 15 — Chinese internet giant Tencent said today net profit soared nearly 17 per cent in the first quarter as the company appeared set to emerge from the battering it received from Beijing’s crackdown on gaming. Shenzhen-based…


TUI stays in red with 737 MAX fleet grounded

BERLIN, May 15 — With its Boeing 737 MAX fleet grounded, tour operator TUI announced today a deeper net loss for the first half of the year and slashed its 2019 forecast. In the first half from October to March — a traditionally slow period —…


Bursa Malaysia ends above key 1,600 level buoyed by bargain hunting

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