KUALA LUMPUR (Sept 1): Asset management and infrastructure solutions company UEM Edgenta Bhd is set to resume its dividend payment in the current financial year ending Dec 31, 2021 (FY21) after it withheld dividends last year.
Its managing director and chief executive officer (CEO) Syahrunizam Samsudin told reporters in a virtual press briefing that the group intends to resume dividend payment in FY21 as it is committed to returning to its dividend policy, as the group aims to be a defensive stock.
The group is maintaining its dividend policy of between 50% to 80% dividend payout ratio based on profit after tax and non-controlling interests (PATANCI), which was adopted in 2018.
Its largest shareholder is Khazanah Nasional Bhd, which holds a 69.14% stake via its wholly-owned subsidiary UEM Group Bhd, according to its 2020 annual report.
Syahrunizam also said the group remains on a strong footing, backed by its healthy balance sheet with a low gearing ratio of 0.3 times, healthy cash balance and strong order book of RM11.6 billion to weather short-term volatility and deploy for growth, where required.
UEM Edgenta has been constantly paying dividends in the past, except for FY20 when the group reported a slump in its earnings to RM13.46 million on the back of revenue of RM2.04 billion, versus a net profit of RM181.78 million with a revenue of RM2.41 billion in FY19.
Excluding the one-off RM50 million impairment undertaken as part of the company’s efforts to restructure and rationalise non-core businesses compounded by the challenging global economy, UEM Edgenta registered normalised net profit of RM64.9 million for FY20.
In the last three financial years, the group paid dividends of 31 sen in FY17, and 14 sen for FY18 and FY19 each.
For the cumulative six months ended June 30, 2021 (6MFY21), the company returned to the black with a net profit of RM12.83 million against a net loss of RM15.76 million recorded in the previous January-June period, as revenue rose 7.56% to RM1.02 billion from RM950.34 million previously.
However, UEM Edgenta said normalised profit after tax for 1HFY21 was lower at RM16.7 million compared with RM25.1 million in 1HFY20.
This is mainly due to lower margins for pavement works and state road maintenance works under infrastructure services and delay in project award and staff mobilisation issues for asset consultancy during the full movement control order (FMCO) and delay in project award in East Malaysia.
In 2QFY21, the group posted a net profit of RM6.13 million compared to a net loss of RM26.91 million a year ago, thanks to higher revenue and lower expenses. Quarterly revenue grew 20.1% to RM538.6 million in 2QFY21 from RM448.47 million a year ago.
The stock was unchanged at RM1.71 at noon break today, giving the company a market capitalisation of RM1.42 billion.