UEM Edgenta’s Q1 2025: Navigating Headwinds with Strategic Growth
UEM Edgenta Berhad (Company No. 196301000166 (5067-M)), a prominent Malaysian-based asset and infrastructure solutions provider, recently released its financial results for the first quarter ended 31 March 2025. The report paints a picture of a challenging quarter, marked by a decline in revenue and a shift from profit to a loss before tax. However, beneath these figures lie strategic advancements and a clear roadmap for future growth, particularly in international markets. This quarter’s performance highlights the dynamic environment UEM Edgenta operates in, balancing operational efficiencies with ambitious expansion plans.
Q1 2025 Financial Performance: A Closer Look
The first quarter of 2025 presented a tough start for UEM Edgenta, with key financial indicators showing a contraction compared to the same period last year. Let’s dive into the core numbers:
Q1 2025
Revenue: RM646.1 million
(Loss) Before Tax: RM(11.8) million
(Loss) For the Period: RM(17.7) million
(Loss) Per Share: (2.16) sen
Q1 2024
Revenue: RM677.6 million
Profit Before Tax: RM19.6 million
Profit For the Period: RM10.2 million
Earnings Per Share: 1.17 sen
Group revenue for Q1 2025 stood at RM646.1 million, a 4.7% decrease from RM677.6 million recorded in the corresponding quarter last year. This decline significantly impacted profitability, with the Group reporting a loss before tax of RM11.8 million, a stark deterioration from the RM19.6 million profit before tax achieved in Q1 2024.
Segmental Performance Breakdown
The performance varied across UEM Edgenta’s key business segments:
Asset Management
- Healthcare Support (HS): Revenue decreased by 1.3% to RM386.1 million (Q1 2024: RM391.4 million). This was primarily due to the termination of a contract in Malaysia.
- Property and Facility Solutions (PFS): In contrast, PFS saw a positive revenue increase of 3.8% to RM78.3 million (Q1 2024: RM75.5 million). This growth was largely driven by revenue contributed by a newly acquired subsidiary in Dubai.
Overall, the Asset Management segment’s profit before tax decreased by RM10.4 million, mainly attributed to the lower revenue from Healthcare Support and reduced margins on existing contracts.
Infrastructure Solutions
- Infrastructure Services (IS): This segment experienced a notable revenue decrease of 18.8% to RM155.7 million (Q1 2024: RM191.9 million). The decline was due to changes in the work scope performed in Q1 2025 compared to Q1 2024.
- Asset Consultancy (AC): A brighter spot, AC’s revenue increased by 35.6% to RM24.6 million (Q1 2024: RM18.2 million), thanks to a new project that commenced in Q3 2024.
Despite the positive for Asset Consultancy, the Infrastructure Solutions segment’s results deteriorated by RM14.1 million, primarily due to the lower revenue generated by Infrastructure Services.
Financial Health Snapshot
As of 31 March 2025, UEM Edgenta’s financial position showed some shifts:
| Financial Metric | As at 31 March 2025 (RM’000) | As at 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 2,988,681 | 3,010,302 |
| Total Equity | 1,578,841 | 1,622,000 |
| Net Assets per Ordinary Share (RM) | 1.88 | 1.93 |
| Cash, Bank Balances and Deposits | 525,783 | 648,007 |
| Total Borrowings | 428,600 | 435,578 |
The Group’s net assets per ordinary share slightly declined from RM1.93 to RM1.88. Cash and bank balances also saw a reduction, while net cash flows used in operating activities significantly increased to RM108.4 million in Q1 2025, compared to RM49.8 million in Q1 2024, indicating higher operational cash outflows.
Risks and Strategic Outlook
While the first quarter presented challenges, UEM Edgenta is actively implementing strategies to navigate the current economic landscape and capitalise on future opportunities.
The Malaysian economy is projected to grow between 4.5%–5.5% in 2025, buoyed by domestic demand and investment inflows. However, global uncertainties persist with inflationary pressures and geopolitical shifts. UEM Edgenta’s strategic priorities are firmly set on international business expansion, strengthening its presence in key markets such as Singapore, Taiwan, the UAE, and the Kingdom of Saudi Arabia (KSA). The company is also focusing on optimising operational activities in local contracts to preserve margins and drive efficiency, alongside accelerating the commercialisation of its service and product offerings.
Key Strategic Wins and Initiatives:
- Singapore Expansion: UEM Edgenta secured significant contracts valued at S$220.48 million (approximately RM735.23 million) from ALPS Pte Ltd for hospital support services in Singapore, commencing May 2025. This marks a substantial growth platform in the region.
- UAE Market: The company successfully renewed its Wasl DZ1 and DZ2 contracts in the UAE, expanding its portfolio with new buildings.
- Malaysian Growth: A new Integrated Facilities Management (IFM) contract in the minerals sector was awarded in Malaysia, with commissioning set for Q2 2025. The company’s Asseto system is highlighted for its capabilities in CMMS, BMS, and Energy AI, aiming to enhance client asset management.
- Infrastructure Milestones: UEM Edgenta commenced a RM40.43 million, four-year contract for traffic management planning and control services on the Kuala Lumpur–Karak Highway. Furthermore, its subsidiary OPUS was appointed for Network Maintenance Management (NMM) services for non-pavement works across several highways, reinforcing its expertise in the sector.
The report notes strong orderbook replenishments across all business segments and geographies, a testament to the company’s focus on technological innovation, operational discipline, and client relationships. Despite the economic loss reported for the quarter (RM32.0 million compared to RM3.0 million in Q1 2024, mainly due to lower EBIT and higher cost of capital), the outlook for the remainder of the year remains robust, with strategic pivots and differentiated offerings as key growth drivers.
Summary and
UEM Edgenta’s first quarter of 2025 reflects a period of adjustment and strategic realignment. While the shift to a net loss is concerning, it’s crucial to consider the underlying factors, including contract seasonality and the completion of one-off projects. The company is not standing still; it is actively pursuing growth opportunities through international expansion and securing new, significant contracts in both its Asset Management and Infrastructure Solutions segments. The focus on operational efficiency and technological integration, exemplified by the Asseto system, suggests a proactive approach to improving future profitability.
Key points from this report include:
- Revenue and profitability were impacted by contract terminations and changes in work scope, particularly in Healthcare Support and Infrastructure Services.
- Despite the challenging quarter, UEM Edgenta secured substantial new contracts in Singapore, renewed key agreements in the UAE, and won new projects in Malaysia, indicating strong orderbook replenishment.
- The company is actively focusing on international expansion and operational optimisation to drive future growth and improve margins.
- No interim dividend was declared for Q1 2025, consistent with the previous year’s practice of declaring dividends for the full financial year.
For Malaysian retail investors, this report underscores the importance of looking beyond a single quarter’s headline figures. UEM Edgenta is clearly in a transitional phase, re-positioning itself for long-term growth by leveraging its expertise in new markets and enhancing its service offerings. The strategic wins and pipeline of projects indicate potential for recovery and sustained performance in the coming quarters, provided the company effectively executes its operational and expansion plans.
What are your thoughts on UEM Edgenta’s Q1 2025 performance? Do you think the company can maintain this growth momentum in its strategic international markets and improve its profitability in the next few quarters? Share your views in the comment section below!
