KUALA LUMPUR (Feb 29): UEM Edgenta Bhd, in which Khazanah Nasional Bhd owns a 69.14% stake, said it expects to perform better in the upcoming quarters of FY2024 after net profit for the fourth quarter of 2023 (4QFY2023) touched its lowest since the asset management and infrastructure solutions group returned to profit in 3QFY2020.

Improvements will be driven by cost controls rather than revenue, said UEM Edgenta managing director and chief executive officer Syahrunizam Samsudin.

“In terms of cost of sales, we are basically re-baselining the cost for 2024 — there is a cost freeze at the moment... So, the short answer to [whether the weak quarter will persist] is no, we don't see the trend persisting from 4Q,” Syahrunizam told a media and analyst briefing on the company's results on Thursday (Feb 29).

“Of course, I can't tell you what our profit is going to be, but it's definitely going to be better than 4QFY2023. But I think the most important thing is that we need to figure out a way that we can actually do the cost control measures immediately.

“This year, the performance is going to be driven a lot by costs rather than revenue,” he said.

The group's 4QFY2023 net profit for the October to December period plunged to RM2.35 million from RM21.02 million in the corresponding quarter in FY2022, despite revenue rising to RM806.94 million from RM710.53 million, as cost of sales jumped RM118.27 million to RM733.75 million from RM615.48 million, while other income shrank to RM9.32 million from RM27.16 million.

For the full FY2023, the group's net profit was 32.77% lower at RM30.84 million against RM45.88 million in FY2022, though revenue grew 14.08% to RM2.88 billion from RM2.52 billion on higher contribution from asset management, infrastructure solutions and its 'other' business segment.

The group attributed the weaker earnings to global inflationary pressure, higher material costs and rising operational costs.

Besides improving its earnings, Syahrunizam said the group is committed to return a higher dividend to shareholders. UEM Edgenta has a dividend policy of paying out 50% to 80% of its profit after tax.

“My target is to give you (shareholders) back the four sen dividend (paid in FY2022). We are going to target a healthier dividend return to shareholders for 2024,” he said.

The group announced an interim dividend of two sen per share or RM16.63 million in total for FY2023, to be paid on May 17.

“This year is going to be challenging. But we need to make sure that we are a lot leaner so, even with the headwinds, we are a lot stronger than before. So it may mean that we have to change up a lot of things. Business wise, I think we are good as we are going to manage costs more aggressively,” he added.

Shares in UEM Edgenta closed down 1.5 sen at 98.5 sen on Thursday, giving the group a market capitalisation of RM819.15 million.