JWD reveals solid Q1/2020 performance with 7.7% growth in revenue to 966.1 MB amidst negative factors
JWD InfoLogistics Public Company Limited (JWD) emphasized its strength through solid performance despite COVID-19’s negative impact as the Q1/2020 revenue grew 7.7 percent to 966.1 million baht and the net profit growing 4.8 percent to 93.5 million baht from many businesses that managed to expand and also as a result of more effective cost management. It was also indicative that the COVID-19 pandemic has become a stimulating factor for logistics service providers to expedite the adaptation to change and develop the services to suit the needs of the fast-growing e-commerce, as well as planning to expand the B2C business for smaller customers when the previous emphasis was on larger B2B customers.
Dr. Eakapong Tungsrisanguan, Chief Financial Officer of JWD InfoLogistics Public Company Limited (JWD), an ASEAN top logistics and supply chain solution, revealed that the Q1/2020 performance managed to show growth compared to the same period of the previous year although some aspects of the logistics operations were impacted by the COVID-19 pandemic, with revenue totalling 966.1 million baht, or a 7.7-percent growth over last year’s Q1 figure of 896.8 million baht. At the same time, net profit rose 4.8 percent over 89.2 million baht in Q1/2019, to 93.5 million baht.
“JWD’s operations in the first quarter has not been impacted as severely as some other industries. This clearly indicated that the Company has made the right move to get into the market segment that covers many industries while also expanding its businesses to other ASEAN countries, namely, Cambodia, Vietnam, and others. The revenue from many business streams improved satisfactorily while the strict control on SG&A (Selling, General & Administrative Expenses) has resulted in a 20-million-baht reduction in expenses compared to the same period of the previous year,” Dr. Eakapong said.
The factor behind the growth in Q1/2020 revenue and profit over the same period of the previous year was the 25.8-percent increase in revenue in the general warehousing business to 104.1 million baht. This was mainly due to the economic deceleration resulting in the customers keeping their merchandise in the warehouses longer. Also significant was the cold storage business which grew 20.7 percent over the same period of the previous year to 188.4 million baht due to the increase in the quantity of merchandise in storage area of both old and new customers, resulting in the floor area utilization of as high as 80 percent.
The automotive logistics management business showed a 7.9-percent improvement to 124.8 million baht over the same period of the previous year due to business from new customers. However, the amount of work in this past April has declined reflecting the overall picture of the automotive industry that has been impacted globally. The situation is expected to gradually revive when the COVID-19 situation in many countries would start to improve. More significantly, the personal self-storage business grew more than 120 percent to 5.7 million baht due to the proliferation of the e-commerce businesses. In addition, profit-sharing from investment in businesses abroad contributed another 25.1 million baht.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and CEO of JWD, said that the current COVID-19 pandemic situation has resulted in the logistics business operators having to make adjustments to keep up with the on-going changes. This included the domestic transportation services amidst limitations arising from the curfew and lockdown situation in many provinces. Freight forwarding and cross boarder services were also hampered by the reduction in flights, adjustments among shipping lines and some border closures.
However, the COVID-19 crisis has become an instant catalyst spurring the demand for logistics services for e-commerce. Many businesses have adjusted their business model from offline businesses to online platforms to keep up with the changing consumer behavior that is trending to become the “new normal”. Therefore, this is a good opportunity for logistics business operators to reinvent and develop a model of diversified services that can satisfy a multitude of customers’ needs as well as to differentiate from services offered by competitors.
JWD has put in place a plan to support that change through an effective cost management as well as to approach more customers to offer solutions that can alleviate their pain points while also introducing new forms of logistics services that will put higher emphasis on B2C group instead of just the previous B2B group so as to increase the small-business customer base. The Company is also applying new knowledge, IT technology and software systems specifically designed for logistics business to increase the service potentials.
“We want to increase our B2C business this year, especially the personal self-storage business that has received good response from online business operators more of whom have shown interest in renting our storage facilities. We have set the target to become the leader in self-storage business in Thailand with a total storage space of more than 20,000 square meters. Most recently, we have introduced new services, namely the cold chain express delivery, both for chilled and frozen merchandise to fulfill the needs of small businesses and restaurant operators, with impressive results,” Mr. Charvanin said.