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JWD Enjoys Turnarounds: Cold-Storage Biz's Faster-Than-Expected Recovery, Auto Storage Biz's Bright Outlook Driving 2 Consecutive Quarterly Revenue Growth to THB572.8m, Net Profit Growth to THB40.3m in Q1/17

Back15 พฤษภาคม 2560

JWD, a leading fully integrated in-land logistics service provider, is enjoying turnarounds, recording two consecutive quarterly growths. For its Q1/17 results, the rental and service revenue stood at THB572.8 million, a rise by 2.6% q-o-q, or by 4.9% y-o-y, and the net profit for the parent company at THB40.3 million, a 30.2% jump from the Q4/16 figure after irregular income due to incorporation of accounting estimates. The management noted the company is recording healthy growths in several segments, especially the cold-storage segment, which is recovering faster than expected, and the automobile and parts storage and management segment, which is taking more orders. In Q2/17, the company also stands to earn fresh revenue from its less than container load (LCL) business and the automotive parts logistics business run jointly with Siam Motor Industries.

Dr Eakapong Tungsrisanguan, Chief Financial Officer (CFO) of JWD InfoLogistics Public Company Limited (JWD), a leading fully integrated in-land logistics service provider, revealed the company’s Q1/17 (Jan-Mar 2017) results, highlighting the growth results for two consecutive quarters, as well as a rental and service revenue figure of THB572.8 million, which represented a rise by 2.6% from the Q4/16 level of THB558 million, or by 4.9% from the Q1/16 level of THB545.8 million, and a net profit for the parent company figure of THB40.3 million, a 30.2% jump from the THB 30.9 million figure after irregular income due to adoption of accounting estimates for Q4/16.

The factor leading to the growth results for Q1/17 was the higher revenues from the cold storage, automobile and parts storage and management, hazardous goods storage and management and cross border transport segments. Especially, the cold storage segment recovered quickly, as Mahachai warehouse saw strong demands for storage of seafood products coming back, partly due to the facts that it was the first cold-storage warehouse in Mahachai district for which a Marine Stewardship Council (or “MSC”) Licence was granted (MSC is the most widely accepted standards of fishing practices that ensure sustainability and fulfilment of the responsibility to stakeholders and apply to all activities, including marketing, shipment, packaging and storage, involving fishery products, and JWD’s Mahachai warehouse was the only cold-storage warehouse in Mahachai to have been certified for compliance with MSC standards and granted an MSC Licence), and that the improved seafood prices led to rising stock demand. As at the end of Q1/17, the warehousing volume at Mahachai warehouse soared from the bottom level of 16,000 tonnes in the previous year to 32,000 tonnes, nearly reaching the peak recorded in the company’s highly profitable year of 2015. The Suwinthawong cold storage warehouse also saw greater volumes of butter storage and blending orders.

JWD received greater job volumes in the automobile and parts storage and management segment, as customers speeded up automobile production this year. Orders came from both new customers and the existing ones who had renewed their contracts with the company. Revenues were from management of automobile-for-export yards, on-site services and integrated logistics services for automotive parts of Siam Motor Group companies. Other segments were also growing. For the hazardous goods storage and management segment, for example, the number of containers of hazardous goods handled at Laem Chabang Port, Chon Buri, in Q1/17 reached 42,733, up 18.7% year over year, in line with the overall growth in Thailand’s export over the same quarter. The new JWD Chemical Supply Chain (or JCS) service segment attracted new customers continuously and is expected to reach the break-even point and become profitable by Q3/17.

Mr Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer (CEO) of JWD, added that the two consecutive profitable quarterly results were clear signs of JWD’s turnaround. He expected the company to meet the profit target, as it has recorded the business development costs, created a provision for two contingent liabilities since last year and implemented measures to ensure more effective cost control, e.g. the installation of solar rooftop systems on the rooftops of cold storage warehouses to cut power bills and, hence, improve the gross profit margin for the current year.

In Q2/17, JWD will begin earning revenue from its recent investments, such as the less than container load (or LCL) freight consolidation hub for LCL exporters (it is the first operator of such hub within the free zone of Laem Chabang Port, Chon Buri), or the joint venture set up jointly with Siam Motor Industries to supply logistics services for automotive parts to Siam Motor Group companies.

“We foresee a gradually recovering logistics business over Q2, as the Thai government is working hard to address the IUU (illegal, unreported and unregulated) fishing issue, which is good for cold storage warehousing, a connected business. As for the automotive logistics business, it is likely to benefit from some automakers’ moves to speed up automobile production this year. We predict the cross border transport business to record a healthy growth amid the economic booms in the CLMV markets”, said he.