GD Express sets higher capex of RM50m for FY19

Bulk will be used to expand fleet to meet delivery volume growth, especially in e-commerce segment

06 Dec 2018 / 20:01 H.

SHAH ALAM: GD Express Carrier Bhd has allocated a higher capital expenditure (capex) of RM50 million for the financial year ending June 30, 2019 (FY19), from close to RM30 million in FY18.

Its managing director and group CEO Teong Teck Lean (pix) said bulk of the capex will be used to expand its fleet size to cater for the delivery volume growth especially in the e-commerce segment.

Speaking to reporters after its AGM yesterday, he said the capex will also be channeled towards the expansion of its distribution centers, hubs, branches as well as technology advancement.

The group expanded its fleet size to 1,069 units of vehicles in FY18, from 831 units in FY17, with a carrying capacity of 3,028 tonnes up from 2,289 tonnes previously. Currently, the group is operating 250 stations and 87 branches.

Asked on its investment plans going forward, Teong said the company will continue to strengthen its foothold in the region via merger and acquisitions, particularly in Asean countries such as Vietnam, Thailand and the Philippines.

Last October, the group announced the acquisition of shares in PT SAP Express in Indonesia (SAP) to tap into the Indonesian express delivery landscape.

Teong said despite the challenging operating environment in the country, SAP is on track to grow its presence in the industry and the group has been assisting the latter in terms of providing financial and technological advice.

To recap, SAP has been experiencing losses since 2015 but at a declining pace.

On its outlook, he said the intense competition within the express delivery market and rising pressure on its operating costs partly due to higher minimum wages will continue to add challenges to its financial performance in Financial Year 2019.

Going forward, Teong said the group is positioning itself to embrace the challenge by continuing to improve its operational capabilities and innovations to stay relevant and ahead of its competitors.

“We have done a lot of costs saving measures to many of our processes and strengthening our ecosystem so it can provide better solutions to our customers. Hopefully, we can continue to capture the market share,” he added.

In its latest financial results, the group’s net profit plunged 18.01% year-on-year to RM6.47 million for the first quarter ended Sept 30, 2018, from RM7.89 million previously due to increase in operating costs.

However, its revenue grew 8.3% to RM74.5 million from RM68.77 million mainly due to increase in demand of the courier services for e-commerce business.

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