I am pleased to present my fifteenth annual statement to our fellow shareholders for the financial year ended 30 June 2019.
Headwinds from the continuing US-China trade dispute buffeted global trade and had a negative effect on the Malaysian economy. Effects of a fiscal consolidation (belt-tightening) exercise of the country's finances also contributed to the general slowdown. Growth in our economy is expected to remain within 4.3 percent to 4.8 percent in 2019, mainly supported by private sector activity
The express carrier industry however, remained steady, thanks to continued growth in E-commerce which necessitated the demand for more express delivery services. But this sustained growth did not translate to better profits as competition for a share of the express delivery market intensified. Besides the entry of significant players from other logistics sectors into the already crowded express delivery space, many of the existing market players also resorted to throwing prices to maintain or gain market share. This has compressed profit margins for all.
The board of directors has declared a first and final dividend of 0.25 sen per share for every existing share.
In April this year, the Group signed a regional agreement with RedCargo Logistics, the cargo and logistics platform of AirAsia, the world's leading low cost airline. This new partnership provides GDEX customers with access to AirAsia's extensive network, meaning goods are able to be transported and delivered efficiently on more than 5,000 weekly flights across Asia Pacific.
As part of the new agreement, RedCargo Logistics will have opportunities to explore last mile capabilities and other cross-border logistics potentials with GDEX.
This strategic tie-up will enable GDEX to enhance customer satisfaction and flexibility as well as improve its E-commerce connectivity. It will also go a long way to help realise the Group's ambition to become the foremost express carrier in ASEAN.
The Group completed its subscription of a 44.5 percent stake in PT Satria Antaran Prima (SAPX), an up and coming express carrier, in early 2019. SAPX, which is now listed on the Indonesian Stock Exchange, has more than 60 branches and employs over 2,000 employees. We will continue to work closer with SAPX to harness the synergies between us.
In the face of mounting competition, the Group has learnt to "roll with the punches". Instead of being overzealous on intense competition, the Group focussed on improving the capabilities of its workers through education and training, upgrading its capacities in systems and processes, strengthening its information flow and continuously aligning its assets to improve connectivity and customer satisfaction. Our response thus lies in the provision of even better quality service, greater convenience, speedier delivery and more product reliability.
E-commerce is here to stay and it is changing the way business is conducted. The traditional brick and mortar business is also going through a lot of transformation with more digitised systems and processes. Opportunities are plentiful for those who embrace technology and are able to take advantage of the myriad new E-processes that are sweeping the world. The Group is positioning itself for such opportunities through its relentless drive in increased automation and technical innovation.
In uncertain and trying times, it is always prudent to tread carefully than to try and expand aggressively. Nevertheless, opportunities to invest in similar express carrier operations in other parts of ASEAN do present themselves, given the similarity in culture and business environment in the ASEAN countries. The Group is actively exploring such opportunities to see if such businesses meet our investing and operational criteria.
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, business associates and the various statutory and government bodies which have facilitated the Group in its operations.
I am also thankful to our shareholders for their patience and confidence in us.
To the Board of Directors, I would like to express my admiration and sincere thanks for fulfilling your commitment and obligations. I would like to take this opportunity to welcome Ms Low Ngai Yuen and Mr Lai Tak Loi as Directors to the Board. I would also like to thank Mr Woo Keng Leong who has resigned as Director for his contributions.
Last but not least, I want to thank everyone for their valuable contributions. I am hopeful that the year ahead will be better.
Dato' Capt. Ahmad Sufian