Chairman's Statement

Dear Shareholders,

I am pleased to present my fourteenth annual statement to our fellow stakeholders for the financial year ended 30 June 2018.

The Malaysian economy continued to improve, buoyed by firmer oil prices and stronger exports. The steady recovery in oil prices, from around US$55 per barrel to above US$70 per barrel in mid-2018 bodes well as it placed more resources for developing the country. Better demand of exports (commodities, electrical and electronic products) contributed to a healthier trade balance for Malaysia. The Ringgit hovers around RM4.00 against the US dollar benchmark.

The express delivery business continued to enjoy strong growth due to the stronger demand of E-commerce. This heightened demand resulted in intense competition from the emergence of many new deep-pocketed players. Many local logistics firms joined the fray by adding last mile delivery to their portfolios. Despite these challenges, our Group continued to perform up to expectations, although our business margins were under increasing pressure.

Dividend Payment

The board of directors has declared a first and final dividend of 0.20 sen per share for every existing share. The board has also decided to continue with its dividend reinvestment plan which provides an option for the dividends received to be converted into shares.

Significant Developments

In January this year, the Group embarked on an entrepreneurship programme tailored especially for the rural community. Called “Kampung By GDEX”, this programme, a collaborative effort between Malaysian Communications and Multimedia Commission (MCMC), Telekom Malaysia Berhad, MSD Digital Intelligence Sdn Bhd, Malaysia Internet Center and GDEX, aims to promote and stimulate E-commerce activities in the rural areas.

"Kampung By GDEX" was created to help small business owners and entrepreneurs in terms of logistics, whereby GDEX offers express delivery solutions to them to promote their products to a bigger market place. This initiative will not only provide better access to express delivery services to the rural people, small business owners and entrepreneurs but also assist them to increase their earnings.

In April this year, the Group launched the GDEX Academy in collaboration with the Jabatan Pembangunan Kemahiran Malaysia (Department of Skills Development Malaysia) which is under the Ministry of Human Resources. This Academy, to be manned by certified Operations personnel in the Group, will provide first hand on-the-job training for those interested in building a career in the fast-growing express delivery industry.

In mitigating the intense competition and growing demand for express delivery services, the Group went on an accelerated expansion programme. We increased the workforce, expanded the delivery fleet, enlarged our network by adding more new branches and increased our warehouse space. A new E-commerce and Linehaul Hub was also opened in Kuching, Sarawak in October 2017. This new hub will not only increase our express delivery footprint but also enhance the development of the digital economy and E-Commerce in Sarawak.

The Group continued to affirm and strengthen its various regional tie-ups with its strategic partners. Our relations and collaboration with these partners continue to flourish with the constant sharing of information and exchange of ideas.

Challenges and Opportunities

With competition in the express delivery industry growing stiffer by the day, the Group must stay focus and strive to create value to all stakeholders. While we have expanded our logistics footprints locally and regionally, we need to ensure that our operations grow in tandem with our rapid growth. We can only achieve our goals if the Group is committed to the tasks ahead.

In view of the above, there is an urgent need to continue strengthening the Group’s resources for greater connectivity and to compete effectively with other players in the industry.

At the same time, the Group must understand the needs of the market and the community to devise the right product mix and marketing strategy.

The Future

The uncertainty in the global economy, due in part to the change in the US trade policy, may increase the volatility in the marketplace.

The Group must remain vigilant and stay focussed to remain ahead of the competition.

With the emerging E-commerce trends and better cross border opportunities for the express delivery sector, there is room for continued strong growth. Thus, in a market rife with competition, only the strongest, fittest and most agile will survive and receive tremendous rewards. We hope GDEX, like the Yellow Meranti tree, will rise head and shoulders above all others and be the strongest contender for the express delivery crown in the ASEAN region.

Acknowledgement

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 thank Ms. Ho Swee Fong who has resigned as Director for her contributions.

Last but not least, I want to thank everyone for their valuable contributions. I look forward to a better year ahead.

Dato' Capt. Ahmad Sufian
Chairman