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Q1 2022 performance Bursa Logistics Companies

Period : 2022

Date : 11th June 2022

Researcher : Esther Low


2022 Q-O-Q revenue for Bursa listed logistics companies


For Q1 of 2022, Bursa listed logistics companies in all industries except e-commerce posted a higher revenue compared to the same reporting period in 2021. The stronger start for the logistics companies this year is attributed to reopening of borders and lifting of travel restrictions.



Q1 2022 revenue for Bursa listed logistics companies in e-commerce category


Logistics companies operating in the e commerce industry reported a decrease in revenue for Q1 2021. The continuous drop in revenue brings to attention the competitiveness of the industry these companies are operating in. Last year CJ Century Logistics disposed their loss-making courier unit for RM 7.47 million due to the difficult environment to operate in.


This year Nationwide Express was delisted from Bursa Malaysia on 5th of April due to group’s failure to submit its regulation plans. In September 2020, independent auditor Ernst & Young raise a flag of concern on Nationwide Express’ ability to continue operation with its net loss of RM 35.3 and RM 49.9 million on group and company level respectively for its 2020/2021 financial year.


The struggle of both CJ Logistics Express and Nationwide Express highlights the extremely competitive environment postal services are operating in. Pos Malaysia has reported a continuous drop in revenue from Q1 2021 (RM 595,277 million) till Q1 2022 (RM 484,346 million), overall revenue has dropped by 18.6%. For Q1 2022 the group attributed the lower revenue to the 25% decrease from their postal and logistics segment, the former contributed by the drop in parcel volumes as consumers shift to brick-and-mortar shopping following the relaxation of the lockdowns.


In addition to that, Pos Malaysia also shared that the double effect of major ecommerce players such as Lazada and Shopee leveraging on their own in-house delivery capabilities as well as the penetration of international postal startups in Malaysia has cost the group to lose market share and provide an unsustainable downwards pressure towards prices. However, the group remains confident that they can remain competitive due to their target goal of achieving 92% next day deliveries for all parcels received anywhere in Malaysia.


GD Express has also reported a similar trend of continuous lower revenue for the same period. The group reported a revenue of RM 106 million in Q1 2021 but fell by 13.2% to RM 92 million in Q1 2022. Managing Director and Group CEO, Teong Teck Lean shared in an interview with The Edge Markets similar challenges to Pos Malaysia where stiff competitive pricing by new entrants to the market has provide a lot of complication and challenges to local companies operating in the postal and courier services.


Some of these new entrants would even offer free delivery services to grab market share according to Teong. GD Express however is confident that they will remain resilient through a series of strategic investments and expansion in Vietnam, Indonesia and Malaysia.



Q1 2022 revenue for Bursa listed logistics companies in marine category


Overall, the marine logistics companies operating various ports in Malaysia has enjoyed good revenues from the elevated ocean freight rates. Bintulu Port Holdings reported a 7.2% increase in revenue from RM 185 million in Q1 2021 to RM 198 million in Q1 2022. Meanwhile Westport Holdings Berhad reported a revenue of RM 516 million in Q1 2022 a marginal increase of 1.6% from Rm 508 million in Q1 2021. Suria Capital Holdings who operates eight ports in Sabah meanwhile reported an increase of close to 30% in revenue in between the same reporting period.


Westport Holdings reported the growth in revenue was due to growth in their container revenue segment. Suria Capital Holdings meanwhile reported a higher cargo throughput due to higher tonnage handling especially in wood products, palm oil and PK, and fertilizer. The group also reported an increase in total TEUs handled which has increased by 7% from 95,293 TEUs to 101,597 TEUs the preceding quarter (Q1 2021).



Q1 2022 revenue for Bursa listed logistics companies in the 3PL category


Bursa listed logistics companies in the 3PL category remains a mixed bag compared to the ecommerce logistics and maritime logistics companies. Tasco reported an increase in revenue by 42.2% from RM 296 million in Q1 2021 to RM 421 million in Q1 2022. However, the Q1 2022 revenue is a drop of 7.5% from its previous quarter of RM 455 million. The increase in revenue is due to elevated freight rates that has benefitted Tasco’s freight forwarding division.


Meanwhile CJ Century reported a continuous drop in revenue from Q1 till Q4 of 2021, however revenue increased again in Q1 of 2022 by 18.9% to RM 243 million from its previous quarter of RM 204 million. The increase in revenue was attributed to higher export volumes handled in their total logistics services segment.



Overall


Outlook for the companies operating postal and courier services remains bleak as these companies are faced with stiff competition from international start ups looking to penetrate or expand their business footprint. These companies such as Ninja Van and J&T Express are often backed by huge fundings from investors such as Alibaba Group or even national postal service provider as we have shared in our earlier article in January 2022.


The presence of such agile and adaptable new entrants who will do whatever it takes to control market share and parcel volumes will create a difficult environment for both GD Express, Pos Malaysia and other local homegrown courier services to operate in.


Meanwhile as the world emerges from its long lockdown and demand for goods and commodities continue to recover, supply chain bottlenecks and container shortages will continue to be the support for elevated freight rates. As such companies related to cargo clearances, freight forwarding, haulage, container handlings, and 3PLs will continue to enjoy a higher revenue as seen in Bintulu Port Holdings, Westport, Suria Capital, Tasco and CJ Century.




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