As main businesses in Thailand show impressive results, Cambodia and Vietnam also shine
The Company is ready to expand investment in businesses with new S-curve potential
JWD InfoLogistics Public Company Limited (JWD) announced the net profit for the first nine months of 2019 of 244.0 million baht, or an increase of 52.0 percent over the same period of the previous year, and similar to the net profit for the entire year of 2018, while Q3/2019 posted a net profit of 75.0 million baht – a 7.0-percent gain over the same period of the previous year after the Company’s existing businesses made significant growth compared to competition in the midst of the on-going trade war situation, baht fluctuation and the worries over the United States’ GSP revocation. Meanwhile, the new businesses that were launched during the past two years were in the process of ramping up revenue-making with break-even point in mind. Also being expanded are the investments in self-storage and the integrated Art Space to store artworks. In Cambodia and Vietnam, the businesses are making good progress as well.
Dr. Eakapong Tungsrisanguan, Chief Financial Officer (CFO) of JWD InfoLogistics Public Company Limited (JWD), an ASEAN top logistics and supply chain solution, revealed that the overall picture of the Company’s performance for the first nine months of this year showed an overall revenue of 2,671.6 million baht, equivalent to a 15.3-percent growth compared to last year’s revenue of 2,317.7 million baht. The net profit of 244.0 million baht was 52.0 percent higher than last years’ figure of 160.5 million baht. This year’s net profit was equivalent to the profit for the whole year 2018 despite carrying the costs in business investments and the negative factors due to the economic slowdown. The performance of Q3/2019 showed a net profit of 75 million baht – a 7.0-percent increase over the same period of the previous year at 70.1 million baht. If taking into consideration the impairment of two assets totalling 6.9 million baht, the net profit would be 81.9 million baht which is considered an exceptional growth.
As evident in the performance while considering only the existing businesses such as the storage and management of hazardous materials, the automotive storage and management and cold storage, the growth was considered admirable compared to competitors in the same field of business. This is despite the on-going trade war situation, and currency exchange fluctuation and the worries over the United States’ GSP revocation. As such, those businesses were still considered to be the sustainable cash cows for the Company.
Meanwhile, the performances of new businesses invested in during the past two years, namely, the container lifting service for rail transport, the number of containers declined compared to the previous year because of the slowdown in trade due to the trade war while the State Railways of Thailand (SRT) also hiked the transportation fee for containers. As for the food service business that the Company invested in CSLF of Taiwan, the Q3 performance grew slower than anticipated as it was the low season for the business. However, Q4/2019 performance is expected to show improved result as it would be the high season for the food service business.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer (CEO) of JWD, said that under the circumstances of the prevailing economic condition that is still in a slowdown mode, JWD will still move forward in investment in the businesses with high potential and with the opportunity to be the new S-curve, such as the investment in the Siam branch of the self-storage business that fulfilled the needs of residents with limited spaces as well as SMEs that need mid-town storage spaces. At present, the business is still moving toward break-even point. In addition, Art Space, a business that provides integrated storage and management for art pieces will soon be launched.
In addition, the Company has expanded the businesses of cold storage and express transport services to augment the existing cold storage service in order to expand the customer base and fulfill the customers’ needs in the age of e-commerce. Also, in the pipeline is the policy to expand cargo transport by rail to multimodal transportation as an extension to the container lifting services onto rail transport at Laem Chabang Deep Sea Port.
The latest development is that JWD has been authorized by the Port Authority of Thailand as the sole service provider with the right to lift containers at the barge terminal inside Laem Chabang Port. The operation is expected to start early next year. Furthermore, the Company is also interested to expand the business to become the single rail transfer operator (SRTO) which will help to increase the rail transport workload and enhance the economy of scale.
Regarding businesses abroad, Cambodia was the country that showed the most promising development. At present, the Company has logistics and warehousing businesses along with a container yard at the Phnom Penh Special Economic Zone (PPSEZ) and is in the process of expanding the cold storage facilities that are expected to start service in early 2020. Meanwhile, the container distribution center in partnership with Bok Seng PPSEZ Company Limited is expected to further grow next year. The investment in the development of an industrial estate within the PPSEZ is in the process of apportioning the land for phase 4 of the development. In Vietnam where JWD has bought into 22.76 percent in Transimex Corporation, the leader in large integrated logistics service provider which is listed in the Ho Chi Minh Stock Exchange in Vietnam, the move is on to expand the services for international retailers while JWD also has a plan to increase its shareholding in the company.
In Indonesia, where the Company has partnered with a local operator, the profit has yet to be realized because of the rather high investment. However, the Company has a plan to adjust the financial structure that will help to reduce capital and interest with the expectation of improved profit next year. The logistics and warehousing businesses in Lao PDR and Myanmar are still not mature, and the Company is keeping a close watch on the economic situation. If the growth trend in favorable, the Company will fully move in to increase its investment.