NAVIGATING MARKET DYNAMICS The global economic landscape presented a complex combination of opportunities and challenges in 2024, with modest economic growth impacted by geopolitical tensions, evolving trade dynamics and shifting energy markets. Ongoing tariff disputes between major economies and rising protectionism created supply chain uncertainties and heightened inflationary pressures. Meanwhile, the rising demand for alternative energy solutions and ongoing global decarbonisation efforts put sustainability and energy efficiency in a growing spotlight. While the Sales Tax rate is maintained at 6%, the increase of Service Tax from 6% to 8% starting 1 March 2024 has impacted operating costs at multiple levels of the business, with cascading effects that continue to challenge our margins and encourage greater operational efficiency. Restructuring and extending concessions in our Healthcare Solutions and Infrastructure Services divisions required a sharp focus on cost control and profitability management. Rising raw material and labour costs, along with changes to regulated wage structures in key markets, further contributed to escalating business expenses. Meanwhile, competition within the industry continues to intensify, with clients increasingly demanding greater value at more competitive prices contract awards. In addition, as we deepen our international footprint, localisation and regulatory requirements necessitate strategic workforce planning, investments in talent development, and close engagement with suppliers and stakeholders. These requirements can also lead to increased operational costs — including compliance-related expenses — while non-compliance may expose the Group to potential fines, penalties, or legal action, underscoring the importance of robust governance and risk management across all markets. Despite these challenges, UEM Edgenta delivered an exceptional performance. We recorded 5.9% year-on-year revenue growth from RM2.9 billion in FY2023 to RM3.0 billion in FY2024, and a 72% increase in profit after tax and zakat (PAT), to RM51.8 million in FY2024 from RM30.1 million in FY2023. Overall, we recorded a 40% growth in order book wins in FY2024, contributing to a robust year-end total of RM8.7 billion — a testament to our brand leadership and commitment to excellence. New contracts under our international portfolio worth RM2.2 billion represented 79% of our total new orders for FY2024, validating our strategic growth initiatives and positioning us well for long-term success. In Singapore and Taiwan, we expanded beyond healthcare solutions into integrated facilities management in high-end hospitality, premium office buildings and transport infrastructure. High renewal rates and major contract extensions in these markets reflect our exceptional track record and ability to meet evolving expectations in a competitive landscape. Our acquisition of Kaizen, UAE’s premier property management company, was completed in February 2024. This marked a pivotal entry into the Middle East’s premium property management sector, opening new opportunities to scale integrated facilities management and asset lifecycle solutions across the Middle East. In Saudi Arabia (KSA), we secured our first hospital contract with the state-of-the-art Olayan Long Term Acute Care & Rehabilitation Hospital. Establishing our presence in healthcare facilities management with one of the region’s fastest-growing markets effectively positions us to support a sector that is central to the Kingdom’s Vision 2030 transformation agenda. Domestically, we secured new contract wins in major infrastructure projects, reinforcing our leadership in asset management and engineering solutions aligned with Malaysia’s national development priorities. Edgenta Healthtronics, a subsidiary of Edgenta Mediserve, has secured a 5-year contract to provide hospital support services at Hospital Cyberjaya. Our progress in FY2024 was honoured with prestigious industry and market accolades. UEM Edgenta was listed in the Fortune Southeast Asia 500, reaffirming our strong regional growth and financial performance. We were also named among the Top 10 Facilities Management companies in Malaysia, Revenue Growth: 5.9% year-on-year Increase in Profit After Tax and Zakat: 72% year-on-year UEM Edgenta has fully consolidated our acquisition of Kaizen, UAE’s premier Property Management Company. This marked a pivotal entry into the Middle East’s premium property management sector. Chairman’s Statement UEM EDGENTA BERHAD 26 Integrated Annual Report 2024
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