We are living in challenging times. The world is threatened by a public health crisis that has affected millions of people, caused much suffering, and impacted the growth of many leading economies. The COVID-19 has created uncertainty and distress, albeit a vaccine might be discovered in the foreseeable future.
The coronavirus pandemic had also caused a significant disruption in the global supply chain as countries like China (which alone account for more than 60% of the world’s consumer goods), were forced to shut down in the early days of the disease. The subsequent lockdowns and closing of borders caused trade access borders to be subsequently impacted. The resulting decline in trade and economic activity led to mass retrenchment and unemployment.
While many industries’ operations were severely curtailed, the food, pharmaceutical, and logistics industries were the few industries that continued to operate during the pandemic as these were deemed essential sectors that provided critical goods and services to the economy.
At the sectoral level, for precautionary and safety purposes, stringent conditions were imposed, especially on all logistics operators, to ensure all goods to be delivered were safe from virus contamination. Every shipment had to be vetted, thoroughly checked, and sanitised, workers were disinfected before and after operations. At the same time, all handling equipment and vehicles were carefully scrubbed and sterilised to ensure it was virus-free.
Except for the marked decline in the third quarter (January to March), the Group turnover increased to RM364.0 million from RM313.9 million previously. However, increased operating costs and a change in accounting treatment caused group pre-tax profits to decline marginally to RM23.7 million from RM32.4 million previously. Group net profits correspondingly declined to RM18.5 million from RM32.5 million previously.
The Group’s EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) increased to RM70.5 million from RM53.7 million previously.
In December last year, the Group announced the acquisition of a 50 percent stake in Noi Bai Express and Trading Joint Stock Company, Vietnam, for RM17 million. Noi Bai Express is a fast-growing express delivery company with a total of four hubs, 45 branches, 41 points of delivery, and 131 trucks. This acquisition marks another milestone in the Group’s regional expansion, after Malaysia, Singapore, and Indonesia.
While the coronavirus pandemic has hastened the transformation of the traditional brick and mortar business in express delivery to one that is increasingly digital and technology-driven, consumer preferences had markedly shifted. Instead of in-person presence to send goods, it has become the norm for customers to transact online in the comfort of their homes. The resulting demand for courier services would benefit express carriers that are nimble and prepared to adapt and invest in the required technological platform.
During the year, the Group intensified its efforts to upgrade and further digitised its online operations making its systems and processes more user-friendly and accessible to the public. Investments in the digital infrastructure to improve the quality and connectivity of its supply chain were hastened. The management also expanded and simplified the payment gateway avenues to enable consumers to make cashless payments easily.
The increased demand for express delivery services required more manpower. During the year, the company increased the workforce to 4,308 from 4,285. The company will continue to provide continuous training to new and existing staff to ensure productivity, operational efficiency, and effectiveness. Our staff underwent a total of 25,495 manhours in training compared to 36,324 manhours previously.
We expect the perennial problem of workers shortage to be mitigated soon with the first batch of graduates with a full certified qualification in Technical and Vocational Education and Training graduate from GDEX Academy, a training institute set up by the Group and certified by the Ministry of Human Resources.
To improve further customer experience, we have equipped all our call centres with Voice Over Internet Protocol technology, which speeds up the response time in answering calls. Customers have better access and shipping experience through the myGDEX portal.
The continued application of GDEX Point of Presence will enhance for greater convenience and expand access to our services by leveraging on the retail outlets of other businesses. To date, we have over 450 touch points locations in Malaysia, including 99 branches, 63 agents, and 251 resellers.
To meet the expanded operations, we had commissioned the use of 16 new trucks, bringing the total of commercial vehicles in service to 1,277 and raising carrying capacity to 3,905 tonnes from 3,580 tonnes previously.
The review of financial performance is contained in our Management Discussion and Analysis on page 16.
In September last year, the Group held a two-day management retreat to brainstorm and come up with definitive solutions to tackle the various challenges facing the Group. The gathering boosted and rejuvenated the participants’ morale and resulted in the review of a new corporate philosophy, which encompasses the improvement of our organizational capacity and effectiveness.
The Group is very mindful of its corporate social responsibility. We shall strive to become a model corporate citizen. We shall continue to review our corporate sustainability programmes to ensure that long term stakeholder value is enhanced by implementing business strategies which doctrines on ethical, social, economic, and the environment, while doing business.
Details of our efforts are contained in our Corporate Sustainability Report on page 36.
We are always grateful to our customers, for we would not be what we are today without their continued support. We would like to assure our customers of our continuous efforts to improve services. I would also like to thank our vendors, business service partners, and the relevant government agencies for their support and cooperation.
I would like to express my sincere appreciation and thanks to the board of directors for their guidance and support. In particular, I would like to commend our past chairman Dato’ Capt. Ahmad Sufian for his invaluable contributions and admirably steered the Group to greater heights over the last 16 years.
I would also like to take this opportunity to welcome Tan Sri Muhammad bin Ibrahim as our new chairman. His vast experiences as the former central bank governor should augur well for the Group.
I look forward to furthering progress and improvement in GDEX as we strive to fulfil our goal of becoming the leading express carrier in the ASEAN region.
Thank you.TEONG TECK LEAN