UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 MANAGEMENT DISCUSSION & ANALYSIS 69 68 BUSINESS REVIEW BUSINESS REVIEW INFRASTRUCTURE SERVICES Our Infrastructure Services division has more than 30 years of experience in highway maintenance operations. We currently manage approximately 4,000 km of highways and roads in Malaysia and Indonesia. Today, our business has expanded into trains, airports, ports, oil and gas, plantations, and other commercial and industrial sectors. Our goal is to deliver optimal solutions with quality to meet clients’ needs. KEY FOCUS AREAS Network Maintenance Services Pavement Products and Services Traffic Management & Safety Services Environmental & Material Testing Services Road Asset Management System KEY INITIATIVES Programme for PLUS Malaysia Berhad Sustaining & Expansion of Roads Maintenance • Completed Benchmarking Exercise (“BMX”) II & III exercise with PLUS, highlighting initiatives towards operational efficiency and optimisation • Successfully launched our Infrastructure Services Vendors Development Programme (“IVDP”), aims to boost vendors’ values and market competitiveness • Launched supplier portal and RAMS for subcontractors • Made further inroads into Pan Malaysia expansion, specifically, the Pan Borneo Highway Sarawak Project • Our team serving Selangor Public Works Department (“JKR”) exceeded the target for work orders beyond contract • Secured Routine Maintenance Services contract along the Lebuhraya Pantai Timur 2 (“LPT2”) RESULTS • The Pavement Research Centre (“PRC”) team successfully developed up to 10 new innovative pavement mixes • Plan to set up a Recycled Asphalt Premix plant as one of Infrastructure Services’ ESG initiatives Developing capabilities & broadening income streams FINANCIAL PERFORMANCE REVENUE (RM mil) • Operational and efficiency initiatives to improve margin • Focused on developing unsolicited proposals and strategic collaborations • Formed strategic alliances for new markets/sectors and technology solutions to broaden income streams • Developed capabilities in road construction and created new products through the PRC (commercialisation and productisation) MITIGATING ACTIONS • Reduction in fees & provisional works from PLUS • Securing new projects in a competitive environment • Challenges caused by the pandemic KEY CHALLENGES 2021 594.4 2020 549.1 PBT (RM mil) 2021* 30.7 2020 38.7 OUTLOOK • In adapting to the new normal and competitive environment, we focus on finding new ways and solutions to keep the business profitable • Focus on our sustainability compliance standards to demonstrate our commitment to long-term sustainable value creation • Continue to expand our local presence and strengthen our position as the main contractor in road construction • We are committed to grow our subcontractor database and relationships, as well as to expand our presence in Southeast Asia • In line with UEM Edgenta’s Sustainability and ESG agenda, we are gearing towards setting up our first RAP plant, thereby, generating cost savings by recycling milling waste and reducing the use of virgin materials KEY ACHIEVEMENTS Certified ISO39001: 2012 Contractors Engagement Roadshow & Infrastructure Services Vendors Development Programme Pre-launch Gold Class 1 Award Malaysian Society for Occupational Safety and Health (“MSOSH”) * Including one-off staff rationalisation cost
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