KUALA LUMPUR (April 16): Express carrier GDEX Bhd, which has been in the red for the last two financial years, is planning to diversify into the provision of information technology (IT) services and solutions to enhance its revenue stream.
The last-mile logistics player previously acquired equity stakes in three IT companies in 2022, namely Web Bytes Sdn Bhd (38% stake), Sweetmag Solutions Sdn Bhd (51%), and Anon Security Sdn Bhd (60%). These acquisitions marked the start of its transformation plan to turn the company around, it said in a bourse filing on Tuesday.
“The investments in Web Bytes, Sweetmag and Anon Security provide the group with an entryway into the IT services and solutions business, including the provision of e-commerce and website development, business software solutions, and cyber security consulting,” it said.
For the financial year ended Dec 31, 2023 (FY2023), the group’s IT segment posted a revenue of RM33.4 million, representing 8.4% of the group’s total revenue of RM397.18 million. But the segment reported a net loss of RM1 million for the year, due to higher staff costs incurred, as the IT subsidiaries expanded their human capital resources to support operational needs.
GDEX anticipates that the segment, which it said is positioned for long-term growth — driven by increasing demand for technology-based solutions — will turn around and contribute to 25% or more of the group’s net profit in the future.
“Furthermore, the group intends to continue to embark on additional ventures, such as investments, acquisitions and strategic collaborations with other potential IT companies, to enhance the prospects of the IT services and solutions business,” it added.
Across the group, GDEX’s net loss doubled to RM34.8 million in FY2023, from RM17.27 million in FY2022, as its core express delivery business was impacted by high competition from foreign courier companies, coupled with what it described as “delivery masking” that prevented merchants and buyers from accessing the group’s delivery services on e-commerce platforms.
GDEX shares dipped half a sen or 2.86% to close at 17 sen on Tuesday, valuing the group at RM959.04 million. Year-to-date, shares of GDEX have fallen three sen or 15%.