Widad Group eyes long-term assets
KUALA LUMPUR: Integrated facility management (IFM) and construction player, Widad Group Bhd (WGB), is in the advanced stage of negotiations with several parties to acquire long-term concession assets in the IFM business.
Group managing director Datuk Mohd Rizal Mohd Jaafar told StarBiz that these local parties include those with businesses in essential services, education and the running of training centres.
“We are looking to acquire long-term assets with concessions of more than 10 years to boost our cash flow and for income stability, ” he said during an interview.
WGB has vast expertise in IFM services and is upbeat that it will be able to secure some of the projects which are under discussion in view of its strong track record.
“The group is also adopting a three-pronged strategy to ensure it has a strong presence in the IFM business.
“Besides going for the normal bidding, we are also leveraging on group synergy and mergers and acquisitions, ” he said.
WGB currently has an outstanding order book of about RM719mil generated from its IFM and construction business.
About 90% of the company’s IFM concessions relate to government contracts and this is expected to support WGB’s growth, going forward.
Widad construction - File picture)Widad construction - File picture)
He said the company was one of the top players with a five-star Construction Industry Development Board rating in IFM services.
He added that this augurs well for WGB in securing long-term contracts.
Its notable projects include the servicing of Istana Negara and JB Sentral.
Some of its IFM concessions include those of University Teknologi Mara (UiTM) Jasin and UiTM Seremban 3, of which will see more than 14 years of stable income stream for the group.
Mohd Rizal added that WGB was also in the final stage of approval from the government for the acquisition of Serendah Heights Sdn Bhd (from Prihatin Ehsan Holdings Sdn Bhd and Training Camp Aabata Sdn Bhd) and Inovatif Mewah Sdn Bhd (from Menang Development (M) Sdn Bhd, Menang industries (M) Sdn Bhd and Tentu Selesa Sdn Bhd).
Serendah Heights is the owner of a concession to develop and maintain the UiTM campus in Jasin, Melaka until 2034.
Inovatif Mewah holds a 23-year concession agreement with the Malaysian government and UiTM for the development of facilities and to carry out maintenance services for the UiTM Seremban 3 campus facilities and infrastructure.
Due to the Covid-19 pandemic and movement control order (MCO), he said the IFM business had overtaken construction and currently accounted for more than 50% of the group’s revenue.
He said as for construction, he hopes to see its recovery by year-end in view of the rollout of the various mega-infrastructure projects as the economy strengthens and the effectiveness of the Covid-19 vaccination programme.
Widad Business Group Sdn Bhd owns a majority stake in WGB and Dataprep Holdings Bhd.
The bumiputra-based company is owned by Kedah-born Tan Sri Muhammad Ikmal Opat Abdullah.
One of the strengths of WGB lies in its ability to leverage on group synergy, Mohd Rizal added.
For example, the clinching of the mixed-development project in Pulau Langkawi last month by its parent Widad Business Group.
He said on WGB’s side, it would manage the facilities of the project.
On the whole, the project has an estimated gross development value (GDV) of RM40bil.
Dubbed Widad@Langkasuka, it is expected to be completed within the next 15 to 20 years.
He said another potential growth area for WGB is in the energy segment, which include power plants, hydro and solar projects.
On Feb 3, WGB announced that it had entered into a memorandum of collaboration (MoC) with Motion Ventures Sdn Bhd for the provision of facilities management to renewable energy projects in Peninsular Malaysia.
The solar power facilities comprise community solar projects and large-scale photovoltaic plants with a total capacity of 1,000MW.
The collaboration is expected to enhance its IFM service offerings and potentially expand the company’s revenue and customer base. It would be effective for 12 months upon the execution by the parties with the option to extend upon mutual agreement, the company added.
Motion Ventures currently owns and operates 66 community solar projects in the country, whereby all the electricity generated from the community solar projects will be supplied to the grid via the Renewable Energy Power Purchase Agreement.
On Feb 16, WGB’s holding company Widad Business Group said it had teamed up with Germany’s Voith Hydro GmbH & Co KG to seek out more hydro projects in Malaysia.
Voith Hydro, a manufacturer and supplier for hydropower plants and engineering services, said said more than 50% of the peninsular hydropower plant capacity provided by the company is in Sungai Perak and Cameron Highlands.
About a quarter of the energy generated worldwide from hydropower is produced with turbines and generators from Voith Hydro.
For the third quarter ended Sept 30,2020, WGB’s net profit dwindled to RM1.5mil compared with RM6.8mil a year ago. For the fourth quarter of 2020, Mohd Rizal said he expects some improvement in earnings and hopes to chart a better full-year results for fiscal 2021.