GD Express’ financial year runs from July to June so the three months ended September 30 are its first quarter results.
Happily for the company, its first quarter 2019 revenues rose by 11.4% year-on-year to stand at 83.0 million Malaysian ringgit ($19.8 million). That is an absolute difference of about 8.5 million ringgit ($2.0 million) between the 2019 and 2018 first quarters. Management attributed the higher revenues to an increased demand for business-to-business and business-to-consumer courier services.
Unfortunately, the company’s “other operational income” fell, by about 11.8%, from 3.1 million ringgit ($743,000) to 2.71 million ringgit ($648,000).
Meanwhile, the company’s operational expenses also rose between the reporting periods by about 17.35% to stand at 79.4 million ringgit ($18.9 million).
Profit before tax fell by 28.9% to 6.7 million ringgit ($1.6 million) in the three months ended September 30 this year. The company attributed the fall in profit before tax to higher investment in “human capital,” information technology and other infrastructure. It also attributed the decrease to “more intense competition” that led to lower pricing in pursuit of market share.
Ultimately, that left the company reporting a profit for its first quarter in its 2019-2020 financial year, but it was a profit that was lower than the amount generated in the same quarter in the previous year.
In the three months ending September 30, 2019, GD Express reported a total comprehensive income of 4.7 million ringgit ($1.12 million), a decline of 27.7% from the 6.5 million ringgit ($1.6 million) recorded in the same time period in 2018.
Segment by segment
GD Express operates in several different segments. Its courier business offers same-day and next-day door-delivery service across Malaysia. Through partnerships, the international express business offers an international parcel delivery and freight service. Meanwhile, the GM Logistics business was set up to handle a “growing demand” for logistics and freight in Malaysia. This business offers trucking across Malaysia, along with air freight and ocean freight. GM Logistics also offers cold storage, package and customs clearance services.
The company operates these business in three reportable segments which are “express delivery” (i.e. courier services); logistics; and investment properties.
GD Express’ courier services business had a quarter-on-quarter increase of 9.5% in revenues to 79.6 million ringgit ($19.0 million), but a 19.0% decrease in profits to 8.6 million ringgit ($2.0 million). The decline in profitability in this business segment was attributed to higher workforce investment along with a lowering of prices in pursuit of market share.
GD Express’ logistics business segment reported 3.3 million ringgit of revenues in the three months to September 30, 2019, a 97.5% increase. It also reported a huge increase in losses – on the order of a 710% increase – from a few thousands to losses of 1.6 million ringgit ($377,000). The company attributed losses to costs incurred to expand the company’s warehousing and maintenance.
Finally, the company’s property investment segment notched up some very minor revenues worth a few thousands of U.S. dollars but recorded comparatively substantial losses of about 569,000 ringgit ($136,000). The company said these losses were generated because of costs incurred to pay for property maintenance.
About GD Express
Founded in 1997 to provide an express delivery service, GD Express listed on the Bursa Malaysia in 2005. The Kuala Lumpur-based company has four main transport related business lines. These are domestic express carriage, international express carriage, customized logistics and, finally, logistics services.
As of June 2019, the date of the company’s last annual report, GD Express employed a workforce of 4,285 people and operated a truck fleet of 1,291 vehicles. GD Express has also entered into a partnership with airline AirAsia and can transport its cargo on more than 5,000 weekly flights across the Asia Pacific region.
GD Express also owns a 44.5% equity stake in Satria Antaran Prima (IDX: SAPX) a carrier that is listed on the Indonesian Stock Exchange. The Indonesian carrier operates over 60 branches and employs more than 2,000 workers.