JWD shows performance stronger than overall logistics market H1/2020 revenue increases 4.9% to MB1,853.4 amid COVID-19 H2 results likely to reflect improved economy and demand in automotive sector
JWD InfoLogistics Public Company Limited (JWD) announced the performance that is stronger than the overall logistics market with the H1/2020 revenue increasing by 4.9 percent to 1,853.4 million baht despite the prevailing COVID-19 pandemic due to the respectable growth in the general cargo warehouse and the cold storage businesses. However, the vehicle warehousing and management business, hazardous cargo and transportation were affected by the overall economic situation, resulting in a drop in net profit. The executives indicated that the businesses have already bottomed out and are confident that the performance in the second half of the year will improve over the first half as the automotive industry is on the rebound shoring up logistics demand. Meanwhile, plans are in the pipeline to increase the Cold Chain Express Delivery customer base, open new cross-border transport routes, while following the "Strength in Diversity" model as derived from a large variety of logistics business portfolio.
Dr. Eakapong Tungsrisanguan, Chief Financial Officer of JWD InfoLogistics Public Company Limited (JWD), an ASEAN top logistics and supply chain solution, revealed that the Q2/2020 performance and that of the first six months of the year reflected the strength of the Company in the management of logistics and supply chain businesses in the face of the economic slowdown and the supply chain repercussion from the COVID-19 pandemic. In Q2/2020 the revenue totalled 887.3 million baht – a slight improvement over 869.4 million baht in the same period of the previous year. This has resulted in the total revenue for the first six months of the year reaching 1,853.4 million baht – a 4.9-percent growth compared to 1,766.2 million baht in the same period of the previous year. This is considered to be a better performance than the overall situation of the logistics market.
The increased revenue was due to the general warehousing business that posted a Q2/2020 revenue of 107.3 million baht and 211.4 million baht for the first six months – an increase of 23.5 percent and 24.6 percent, respectively, compared to the same period of the previous year. The warehouse space rental increased to 95.6 percent as of the end of Q2/2020. The cold storage business made 199.4 million baht in Q2/2020 and 387.8 million baht for the entire six months, for growth of 34.7 percent and 27.5 percent, respectively, compared to the same period of the previous year. This was a result of increased amount of rented warehouse spaces, while the JWD Cold Chain Express Delivery business has been expanded with the positive result in the Bangna cold storage space being utilized. In addition, increased revenue was realized from the food service business in Taiwan after earnings started to roll in from the expansion of raw material preparation service for a leading fast-food brand.
Meanwhile, JWD's net profit for Q2/2020 was 48.1 million baht and 141.6 million baht for the year's first six months – a slowdown compared to the same period of the previous year due to the economic impact and the drop in the automotive yard storage and management business, transportation, hazardous material warehousing and management business that were affected by the economic situation and the downward trend in the automotive and auto part industries. Meanwhile, the demand for industrial chemicals was also reduced. However, in May and June this year, almost all brands of auto manufacturers have restarted their production lines, which is a positive indicator.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and CEO of JWD, said he was confident that the H2/2020 performance will be better than the first six months of the year after the automotive yard storage and management business have already past its lowest point and the revenue as well as profit have been gradually improving and are expected to reach their normal levels by next year. Where the hazardous material warehousing and management and transportation businesses are concerned, there is also a positive trend from the gradual improvement in the overall economic picture as a result of the government's economic stimulus measures. These will positively impact the manufacturing sector that has been increasing its demand for raw materials and logistics services.
The Company has planned to boost revenue by expanding the Cold Chain Express Delivery customer base to deliver the goods in the B2C (Business to Customer) format that has been growing in the post-COVID-19 period as well as the cooperation with Vietnamese logistics partner Transimex Corporation to expedite cross-border transportation linking Thailand, Cambodia and Vietnam. At the same time, stricter control on SG&A (Selling, General & Administrative Expenses) has been continuously implemented, particularly in the first half of the year when SG&A has been reduced to 313.9 million baht compared to 353.3 million baht spent in the same period of the previous year.
"Our strong suit is our 'Strength in Diversity' from our business portfolio and the diverse customer base in logistics services and supply chain. Also significant is the diversification of investment in the ASEAN region, leading us to being able to weather strongly all the crises including the COVID-19 pandemic, while the Company's financial situation also remains solid without any liquidity problem. We are confident that our business model that has been put in place will lead us to growth from the diversification in the ASEAN region," Mr. Charvanin concluded.