I am pleased to present my thirteenth annual report to our fellow stakeholders for the financial year ended 30 June 2017.
The Malaysian economy fared better this year, thanks largely to the recovery in commodity prices. Oil price, in particular, has recovered from its record low of US$36 per barrel and has now stabilised at around US$55 to US$60 per barrel. The higher oil revenue has enabled the government to follow through its development projects that helped boost economic activities in the country.
Malaysia recorded an economic growth of five per cent for the period under review. Elsewhere, Britain's decision to pull out from the European Union (Brexit), and the surprised election of Donald Trump as US President (with his America First policy) may affect future global trade landscape.
The emergence of China as a major global player in 2017 created some excitement in international trade and gave rise to business growth opportunities.
Against this background, our Group continued to grow with the faster adoption of E-commerce.
I am pleased to report that the Company had completed a three-for-one bonus issue during the financial year under review. The Board has also declared a first and final dividend of 0.25 sen per share for every existing share.
I am pleased to inform the Group's first major overseas investment. In December 2016, we subscribed to RM10.4 million in convertible bonds in PT Satria Antaran Prima (PTSAP), an up and coming Indonesian express carrier with 56 branches and a workforce of more than 1,500 employees. The convertible bonds, which will mature in 2021, will enable the Group to hold 40 per cent of the company.
This investment, together with our existing collaborative agreement with Pos Indonesia, will give us a firmer foothold in the Indonesian archipelago.
The Group has acquired a 30 per cent stake amounting to RM5.5 million in Web Bytes Sdn Bhd, a cloud-based software company in Penang which specialises in retail management solutions. This acquisition will help to enhance the connectivity and effectiveness of the Group's ecosystem.
The Group will continue to look for opportunities for further investments to enhance its ecosystem and expand its network into the ASEAN region.
Competition in the express delivery service industry is very stiff, given the recent popularity of E-commerce in the region. The Group not only has to contend with newcomers with deep pockets and advanced technology, but also has to compete with the traditional logistics companies entering into the last mile delivery segment. The industry peers have also built up their capacities to compete.
Rising fuel cost and the continued weakening of the Ringgit has resulted in inflation and higher cost of operations which has affected our operating margins.
Where there are tough challenges, there are also great opportunities. In particular, I am most encouraged by the Government's recent decision to launch its first Digital Free Trade Zone (DFTZ) in April 2017. While this signifies the government's decision to embrace E-commerce fully, this move will speed and open up the country's digital and IT infrastructure development footprint tremendously.
By adopting the E-commerce agenda, all stakeholders – government agencies, statutory bodies and the private sector will have to move quickly to develop and use the E-commerce platform to synchronise all their operations digitally.
This should augur well for the express carrier industry as there will be greater and more urgent demand for express delivery services. We need to be vigilant in training and preparing our workforce, and invest strategically in the right equipment, IT systems and processes.
While all these developments are expected to challenge and test our resolve, I am confident of the Group's future and its plans to expand regionally. However, we will, as always, approach our drive into the ASEAN market with care and caution, and by adapting rigorously to the needs of the region.
I would like to thank the management and staff for their continued dedication and support to expand the Group.
My sincere thanks and appreciation also go to our customers, vendors, business associates and the various statutory and government bodies which have facilitated the Group in its operations.
I would also like to take this opportunity to welcome Mr Lee Kah Hin as executive director to the Board.
My sincere thanks also go to our shareholders for their patience and confidence in us.
To the Board of Directors, thank you for fulfilling your commitments and obligations admirably.
Last but not least, I want to thank everyone for their valuable contributions and look forward to a better year ahead.
Dato' Capt. Ahmad Sufian @
Qurnain bin Abdul Rashid