KUALA LUMPUR: Express delivery firm GDEX Bhd, which has incurred losses over the past two financial years, intends to expand its operations into information technology (IT) services and solutions in a bid to bolster its revenue streams.
GDEX previously acquired ownership stakes in three IT enterprises in 2022, namely Web Bytes Sdn Bhd with 38 per cent ownership, Sweetmag Solutions Sdn Bhd with 51 per cent ownership, and Anon Security Sdn Bhd with 60 per cent ownership.
In a Tuesday filing to the stock exchange, GDEX outlined these acquisitions as the initial steps in its strategic turnaround plan.
According to the filing, investments in Web Bytes, Sweetmag, and Anon Security are a gateway for GDEX into the IT services and solutions sector, encompassing areas such as e-commerce and website development, enterprise software solutions, and cybersecurity consulting.
For the financial year ending December 31, 2023 (FY23), the company’s IT division generated RM33.4 million, comprising 8.4 per cent of the total revenue of RM397.18 million.
However, despite this revenue contribution, the segment incurred a net loss of RM1 million for the year.
This loss was primarily attributed to escalated staff expenses, as the IT subsidiaries expanded their workforce to accommodate operational requirements.
GDEX foresees a turnaround in this segment, which it perceives as poised for sustained growth, propelled by the escalating demand for technology-driven solutions.
The company anticipates that the IT segment will rebound and contribute 25 per cent or more of its net profit in the future.
Moreover, GDEX plans to pursue further initiatives, including investments, acquisitions, and strategic partnerships with other promising IT firms, to bolster the potential of its IT services and solutions business.
Across the board, GDEX’s net loss doubled to RM34.8 million in FY23, compared to RM17.27 million in FY22.
This was attributed to challenges in its core express delivery business, including intensified competition from foreign courier firms and what it termed ‘delivery masking,’ hindering access to the company’s delivery services on e-commerce platforms.
On Tuesday, GDEX shares declined by half a sen or 2.86 per cent, closing at 17 sen, resulting in a market capitalisation of RM959.04 million.
Year-to-date, GDEX shares have fallen by three sen or 15 per cent.
