2019 UEM Edgenta Annual Report

Delivering with distinction in Project Management, Asset Management and Technical Consultancy We offer professional services in project management, technical engineering & design and asset management consultancy. WHO WE ARE Asset Consultancy Operational Review Our corporate vision and promise of quality, commitment, integrity and innovation has underpinned our position as a major player in the Malaysian market and abroad. The Asset Consultancy division posted a healthy increase of 15.6% in revenue to reach RM131.9 million in FY2019, mainly arising from our project management consultancy contracts in Sabah and Sarawak. EBITDA rose 16.4% to RM13.5 million and PAT increased 37.7% to RM10.6 million following the growth in revenue, coupled with cost reduction from operational efficiency initiatives. 2019 2018 FINANCIAL PERFORMANCE (RM MILLION) Revenue 114.1 131.9 from 2018 15.6% EBITDA 11.6 13.5 from 2018 16.4% PAT 7.7 10.6 from 2018 37.7% 62 KEY INITIATIVES AND RESULTS OUTLOOK AND PROSPECTS In 2020, the Asset Consultancy division will build on its existing pipeline of projects for long-term growth opportunities in Indonesia, Sabah and Sarawak, where there is a significant need for infrastructure. These include the Project Management Service for the Sarawak Coastal Highway and Second Trunk Road, technical support on Pavement Research Centre, following the signing of an MoU with JKR Sarawak, as well as the Technical Management Services for both the Pan Borneo Highway in Sabah and Sarawak. 63 UEM Edgenta Berhad UEM EDGENTA AT A GLANCE MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION Key Initiatives Results • Developed Digital Twin of the PLUS Highway C3 Section (Sungai Buloh to Tanjung Malim) to demonstrate the benefits of combining the Road Asset Management System (“RAMS”) and Building Information Modelling (“BIM”). This real-time integrated asset management and enterprise system is an in-house product used to improve the operational efficiency and service delivery for asset management services at the North-South Expressway • Successful Proof-of-Concept using drone technology to generate digital elevation map of rock slopes at Bukit Lanjan Interchange to facilitate the inspection and monitoring programme, while alleviating safety risks to the inspectors. The 3D data mapping will be used as the basis to scale up the critical slope inspection programme for the North-South Expressway • Embarked Smart Infrastructure as the potential engine of growth in-lined with the Industry Revolution 4.0 (“IR4”) initiated by the Malaysia Government Employing Technology Different from Competitors Expand business capabilities to offer new services and diversifying into new markets, with a sectoral focus in Road and Rails • Extended asset management capabilities to Rail Sector by securing the Asset Condition Survey of MRT Line 1 through strategic partnership; this marks the first major conditioning assessment on the railway assets in Malaysia • Strengthening our position in the new market by securing new wins on Mega projects such as the Coastal Road Network and Second Trunk Road projects for both Phase 1 and Phase 2 in Sarawak • Expanded business footprint to Sabah and Sarawak in Malaysia, and Indonesia, as well as developed local thought leadership • Restructured the operations to adopt a lean and agile cost structure to maintain competitiveness • Hosted various visits and tours for stakeholders such as MoW, MoT, MoF, and Sarawak’s Public Works Department (“JKR”) and Sarawak’s Ministry of Infrastructure and Port Development, as well as foreign delegates from Indonesia and Myanmar to promote our capabilities and build relationships • Collaboration with JKR Sarawak to propel pavement research and innovation initiatives in the State. Signed a Memorandum of Understanding (“MoU”) to formalise partnership in support of the establishment of a Pavement Research Centre in Sarawak Strengthening Relations and Building Reputation Annual Report 2019 Operational Review