UEM World Bhd has taken a gaint strike back into the RED book when the group announced a net loss of RM11.3 million for the first six months to June 30, 2005, compared with a net profit of RM37 million in the same period a year ago. UEM blame the loss was due to higher costs of producing cement and money that it set aside for an expected loss on overseas construction contracts.
UEM World is still optimistic of turning around in the second half of this year but acknowledged the difficulties that it faces.
UEM Group revenue was flat at RM1.2 billion. Operating expenses however, inched up 9 per cent to RM1.21 billion. At the pre-tax level, its construction, property and cement manufacturing division recorded losses. This was led by its construction business due to a RM56 million provision on overseas contracts. Its engineering, healthcare and environmental services units all made pre-tax profits.
How is it that our giant local corporation who had amassed billions of profit in their heydays are now crawling uphill, panting for survival? Coming back from a near disaster during the economic crisis of 1997 through a massive revamp and reorganization, the results in the last two years were positive signs of recovery and a new lease of life. Now, they may be back to where they are - the RED box area - from where they came from.
The hypothesis is that UEM World, or we can call them Renong in a new dress, may not survive without the golden handouts from the government. The organization had thrived during those golden years largely due to the massive handouts parlayed by the past oligarch. Now, with the new regime, and the absence of mega projects, they now are learning how to crawl.
The probable lesson to learn is that, in corporate management, you have to walk each and every of the steps of management process and learn the skills and knowledge of survival and competition until you reach the level of competency in order to achieve sustainable growth. If ever you do skip any steps or using short-cuts so as to go up faster, you may later have to come back again to go through the whole process.
A child had to learn to crawl, then walk and then jump and run. No amount of rhetorical agenda and keris-wielding will take you to the route of sustainable success.
UEM World is still optimistic of turning around in the second half of this year but acknowledged the difficulties that it faces.
UEM Group revenue was flat at RM1.2 billion. Operating expenses however, inched up 9 per cent to RM1.21 billion. At the pre-tax level, its construction, property and cement manufacturing division recorded losses. This was led by its construction business due to a RM56 million provision on overseas contracts. Its engineering, healthcare and environmental services units all made pre-tax profits.
How is it that our giant local corporation who had amassed billions of profit in their heydays are now crawling uphill, panting for survival? Coming back from a near disaster during the economic crisis of 1997 through a massive revamp and reorganization, the results in the last two years were positive signs of recovery and a new lease of life. Now, they may be back to where they are - the RED box area - from where they came from.
The hypothesis is that UEM World, or we can call them Renong in a new dress, may not survive without the golden handouts from the government. The organization had thrived during those golden years largely due to the massive handouts parlayed by the past oligarch. Now, with the new regime, and the absence of mega projects, they now are learning how to crawl.
The probable lesson to learn is that, in corporate management, you have to walk each and every of the steps of management process and learn the skills and knowledge of survival and competition until you reach the level of competency in order to achieve sustainable growth. If ever you do skip any steps or using short-cuts so as to go up faster, you may later have to come back again to go through the whole process.
A child had to learn to crawl, then walk and then jump and run. No amount of rhetorical agenda and keris-wielding will take you to the route of sustainable success.
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