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Freight Management Holdings
Bhd expects higher contribution from its tug and
barge division in the second half of the current
financial year (FY) ending June 30.
Managing director Chew Chong Keat said this
would be due to the division's fleet renewal
programme and promising business prospects.
In FY07, the division accounted for about 10% of
the company's revenue and gross profit.
FMH ventured into the tug and barge business in
February 2006 when it acquired a 51% stake in
Singapore-based TCH Marine Pte Ltd.
Chew said the company would add two new tugs and
a barge costing RM5.2mil by April.
Freight Management will also dispose one of its
barges under its fleet renewal programme. With
the addition of the two new tugs and a barge,
the company will maintain eight pairs of tugs
and barges plus another spare tug in case of any
breakdown.
“We expect this division to contribute more in
the second half of our current financial year
due to the streamlining of operations,” he told
StarBiz.
He said the company previously experienced some
operational deficiency that had since been
sorted out.
On business prospects, Chew said there was
currently a huge consumption of construction
materials in Singapore and Southern Thailand
where demand had exceeded supply.
“For Singapore, this is due to the development
of its integrated resort,” he said.
He noted that Freight Management usually carried
cement, ceramics and other types of construction
materials.
Chew said that although TCH was a
Singapore-based company, the operation hub of
the company was located in Lumut, Perak, due to
its strategic location midway along the Straits
of Malacca.
“It's more cost-efficient for our business that
mainly deals with Singapore and Southern
Thailand. The repairs and maintenance works are
also done in Lumut,” he added.
On its core business of multimodal freight
transportation and management, Chew said the
company had always been investing and
strengthening its sales and customer service
teams to be competitive in the service industry.
Freight Management is a logistics service
provider for sea, air and rail transportation.
“We have been recruiting and training fresh
graduates as well as our existing employees
continuously to keep them updated on product
knowledge and marketing strategies,” he said.
“In the service industry, it is important to
invest in people; and it has so far shown good
results.”
For the FY08 first half ended Dec 31, Freight
Management reported a 15.0% increase in profit
before tax to RM7.6mil against the same period
of FY07. This was achieved on the back of a
16.2% growth in group revenue to RM107.7mil.
The group’s net profit after minority interest
for the first half also grew by 25.4% to
RM5.6mil, translating into earnings per share of
4.6 sen based on an enlarged share capital of
121.7 million shares.
Chew said for the period, all divisions of the
company showed strong organic growth underpinned
by the multiple but synergistic businesses of
the group. “Despite the fluctuation in freight
rates, pretax margin has largely been
maintained,” he said.
Based on the strong first half, he was confident
that the company would achieve its target of
between 12% and 15% net profit growth in FY08.
Although the main focus of the company was
freight management, he said, the company also
hoped to grow its supporting services in
warehousing and haulage.
“To date, we are fighting for space in our
advanced 200,000 sq ft warehouse. We have
additional five acres adjacent to our
headquarters in Port Klang if the needs arose to
build more warehouses,” he said, adding that
there was, however, no immediate plan to do so.
He said its haulage services had been expanded
to support the freight business.
“To date, we have spent about RM4mil on 11 prime
movers and 55 trailers. We have extra permits
from Commercial Vehicle Licensing Board to grow
the fleet,” he said.
On its plan to acquire a domestic logistics
firm, Chew said the negotiations had taken
longer than expected. “Both parties have yet to
reach a common ground,” he said. |
