COURIER firm GD Express Carrier Bhd expects a double-digit growth in revenue in its current financial year (FY) ending June 30 as a result of efforts to mitigate the effects of fuel price increase and optimise the utilisation of assets.
Executive deputy chairman Teong Teck Lean said the Mesdaq-listed company had started to improve its level of efficiency this year following escalating operational costs caused by the higher fuel price.
“First, we are going to increase the capacity of our line haul trucks that are the arteries connecting our network. We have allocated RM1mil this year to upgrade our trucks to enable them to carry more goods,” he told StarBiz.
He said in the near future, GD Express would also look at the utilisation of human capital to boost efficiency and minimise costs.
“The increase in fuel price not only affects the transport industry but also causes price hikes in products. For example, the prices of spare parts have surged and that has resulted in higher operational costs,” he said.
“In this industry, we have fuel surcharges, but we cannot pass everything to the consumers. Thus, we are continuously finding ways internally to minimise operational costs.”
Teong said that although GD Express had forecast a double-digit growth in revenue this year, it would be an uphill battle to achieve last year’s record due to the challenges from increasing operational costs and the weakening US dollar.
For FY07, the company posted a 25.1% growth in revenue to RM57.4mil. Its after-tax profit also doubled to RM2.1mil from RM1.2mil in the previous year.
“The gestation period for any company in this industry is quite long since a lot of investment in infrastructure is needed. After 11 years in the industry, we feel that we have everything in place now.
“But we are not resting on our laurels and will continue to make our services relevant to the market,” he said.
Going forward, Teong said GD Express aspired to grow its business regionally.
Currently, one of its wholly-owned subsidiaries is located across the causeway.
“We are toying with the idea of opening up other branches in Asean and Indochina. The growing businesses in this region provide a viable opportunity for GD Express to expand further,” he said.Teong has recently gone to Thailand and Laos to explore opportunities in those markets.
But he added that GD Express would scrutinise the investment opportunities thoroughly as it wanted to ensure the ventures’ profitability.
“With the huge capital needed to venture outside Malaysia, all risks must be evaluated,” he said.
On competition with multinational express carriers, Teong said they complemented each other.
“We have the local expertise while they have a wider outreach globally,” he explained.
Formed in 1997, GD Express currently has 50 branches nationwide. It provides a wide range of logistics solutions for both domestic and international markets.