Bursa Annual Report

Period : 2006-2021

Date : 4th Dec 2021

Researcher : Esther Low

Q-o-Q revenue for Bursa listed logistics companies (2020-2021)

Bursa listed logistics companies started strong on the first quarter of 2021 with a total

revenue of MYR 6.1 billion but experienced a slight dip in Q2 of 2021 to RM 5.9 billion

(down 3.96%) then returned stronger to RM 6.4 billion (9.13% increase) in Q3 2021.

Compared to the same reporting period in 2020, the Bursa listed logistics companies

experienced an 18% increase in revenue from RM 5.4 billion to RM 6.4 billion in Q3 2020

and 2021 respectively.

The main driver to revenue for Bursa listed logistics companies has always originated from

the maritime category due to larger import/export volumes and margins. The meteoric rise

of ocean freight rates due to the supply chain disruption since COVID-19 has helped increase revenue for the maritime industry. As of Q3 2021, the maritime industry reported

a staggering RM 4.2 billion revenue. In comparison to the previous quarter, it was a 12.54%

increase (Q2 2021: RM 3.7 billion).

For the 3PL category, the first half of 2021 mark stronger growth as they reported

continuous growth since Q3 2020. However, the 3PL category experienced a slight dip in

revenue from RM 1.2 billion in Q2 2021 to RM 1.1 billion Q3 2021, a drop of 5.6%.

Meanwhile the e-commerce Bursa listed companies started the year with a revenue of RM

714 million but dipped to RM 652 million (down 9.61%) for both Q2 and Q3 2021.

The Bursa listed companies in the air logistics category were able to consolidate some of

their losses on the back of higher air freight prices as well as higher passenger volumes due

to interstate travel within the country. Revenue for the industry was up by 42% in Q3 2021

(RM 461 million) compared to the previous quarter (Q2 2021: RM 323 million).

Q-o-Q PBT for Bursa listed logistics companies (2020-2021)

PBT of the Bursa listed logistics companies supports the recovery of these companies as we

adapt to the new normal. In Q1 of 2021 the total PBT across the board was a profit of RM

444 million in comparison to Q4 2020 where PBT was down RM 446 million. The Bursa

listed logistics companies record continuous growth in PBT from RM 444 million in Q1 to

RM 616 million in Q3 2021. Although PBT is not as close as it was pre-pandemic, the

continuous growth is a welcoming sign of recovery.

Drilling down on the PBT by Bursa listed logistics category, the losses in PBT mainly

stemmed from the lagging air logistics industry that is heavily affected by the ongoing

pandemic. The drop in passenger numbers has dealt a heavy blow to Malaysia Airport

Holdings Berhad who manages, operates, and maintains the KLIA 1 and 2. However, the

rise in air freight prices, partial lifting of travel bans, and increase in e-commerce sales has

help MAHB reduce its losses for most of 2021 as compared to 2020 where total losses

before tax was a staggering RM 1.7 billion.

The Bursa listed e-commerce logistics industry has experienced a less than stellar 2020

and 2021 in terms of PBT, reporting a consistent loss before tax. Overall, the e-commerce

logistics industry in Malaysia will remain very competitive despite an exponential growth

outlook of e-commerce shopping within the Southeast Asia region.

According to a report by the Malaysian Investment Development Authority (MIDA),

Malaysia’s share of total online retail sales is estimated to be 2.7% out of the ASEAN e-

commerce market valuation of USD 64.8 billion. The e-commerce industry has been a game

changer to the Malaysian logistics scene with the launch of the Digital Free Trade Zone

(DFTZ) in 2017 by MIDA

.

The introduction of DFTZ has provided the e-commerce companies with a seamless

platform for both trading activities and logistics fulfilment. To support the goals of the

DFTZ, an e-fulfilment hub has been developed at KL Airport Cargo Terminal (KACT 1) in

2017. The KACT 1 is currently operated by Pos Malaysia to serve Lazada.

Fast forward to 2021, there is now multiple online shopping platforms with their own

logistics fulfilment hub, such examples are Shopee Express and Lazada Express. In a world of instant gratification, e-commerce giants are now ramping up efforts to shorten delivery

time and reduce delivery costs to cater to the growing reliance on e-commerce shopping

and on demand delivery services. For example, Shopee has partnered up with smaller last

mile logistics company such as ParcelHub to increase the number of drop-off points,

warehouses, sorting centers and freelance delivery drivers.

These partnerships between giant e-commerce platforms and smaller last mile logistics

provider have created an extremely competitive e-commerce logistics market with thin

margins. This poses a huge challenge for the Bursa listed logistics companies who operate

in the e-commerce sphere such examples would be Pos Malaysia, GDEX and Nationwide

Express.

Overall, the Bursa listed logistics companies especially in the 3PL and Maritime category

are recovering on the back of higher revenues and higher PBTs. However as cautioned in

the last write up, the Omicron variant – that is now spreading rapidly - as well as the

efficacy of current vaccines against it may pose future risks of further erosion in revenue

and PBT in the industry.