Section 3 UEM Edgenta Berhad FROM OUR LEADERSHIP 40 FINANCIAL REVIEW OVERVIEW In the midst of global supply chain disruptions, inflationary pressures and legislative changes, UEM Edgenta has demonstrated resilience in a challenging economic environment. The Group achieved notable revenue growth of 14.2%, reaching RM2.9 billion, driven by successful contract renewals and fulfilment of work orders from healthy contract wins across our operations in Malaysia, Singapore, Taiwan and the United Arab Emirates (“UAE”). Furthermore, the completion of the MEEM for Facilities Management Company (“MEEM”) acquisition allowed us to realise our first-year revenue from the Kingdom of Saudi Arabia (“KSA”). Nevertheless, we encountered persistent escalations in costs, particularly in labour, raw materials, and consumables, which have exerted pressure on our margin and overall financial performance. The on-going challenges in the labour market, marked by increased wage demands and compliance with evolving labour regulations, have led to higher manpower costs. Similarly, volatility in commodity prices, supply chain disruptions and fluctuations in currency exchange rates have contributed to rising costs across various operational facets. Our financial performance has also been affected by the initial costs associated with operationalising in new markets and investing in the development of tech-enabled products. While these initiatives are currently in their early stages and are not yet making a significant contribution to our bottom line, we anticipate their contribution to grow in the future. These challenges, coupled with the broader macroeconomic landscape and intense industry competition, have necessitated a strategic focus on our cost and margin management. In response, we have initiated a comprehensive set of strategic cost optimisation and operational efficiency measures. These targeted initiatives are designed to mitigate the impacts of escalating costs and intensifying competition, reinforcing our operational resilience and financial health. As we steadfastly progress towards the realisation of our EoTF2025 plan, our commitment to value extraction through cost optimisation and operational efficiency remains pivotal in our journey to scale and enhance the profitability of our business.
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