Nov 02, 2009
By Kang Siew Li
Local air express firm GD Express Carrier Bhd (GDEX) said its revenue growth is unlikely to return to levels seen before fiscal year 2007/08 when it rose as high as 182 per cent, as its business reached a stable and large base.
It is cautiously optimistic about the future, but hopeful the figure will remain in double digit for the current fiscal year ending June 30 2010, said its executive deputy chairman Teong Teck Lean.
The ACE-listed company saw revenue grow at a robust 40 per cent to a record 182 per cent between fiscal years 2005/06 and 2007/08.
Revenue growth tapered off to 12 per cent in the fiscal year just-ended.
Teong said capital expenditures (capex) for the next one to two years will also be smaller, as it has expanded its hub facility in Petaling Jaya significantly over the last few years to support growth demands for the next five to six years.
"Today, we have one of the best (sorting) facilities in the country. Our network of offices are all linked up with each other. This does not mean that we will stop expanding or upgrading our facilities, but the capex will be small," he told Business Times.
GDEX handles some 30,000 consignments per day through its hub in Petaling Jaya, which has a capacity to handle up to 55,000 consignments per day.
Teong said the company continued to do well for the fiscal year ended June 30 2009, as it managed to secure new customers to offset declining cargo volume from existing customers.
"We managed to win over a lot more new customers to make up for the lost in volume of the existing customers. But this increase in market share is from existing players," he said.
The company saw some pick-up in volume in the July to September period, but Teong said he does not know how long it can last.
"Hopefully in the coming months there is a turnaround in certain industries, as people feel more positive about the economy. Some companies' stock levels are at low levels, so I see them replenishing their stock in the coming months which in turn will benefit air cargo companies like us," he added.
Teong remains optimistic on the long-term growth potential of the local air express industry.
Citing the air express industry in Australia, which has roughly the same population as Malaysia, Teong said it is valued at A$20 billion (A$1 = RM3.12). In comparison, the industry in Malaysia is only about RM1.6 billion.
"As such, as the country becomes more developed and the cost of transporting goods becomes more expensive, more local companies will turn to outsourcing to cut costs. That's when I see this industry starting to grow strongly," he said.