This article first appeared in The Edge Financial Daily on May 28, 2019

KUALA LUMPUR: An absence of income tax expense helped GD Express Carrier Bhd (GDex) book a net profit of RM5.43 million in the third quarter ended March 31, 2019 (3QFY19), more than double the RM2.62 million the year before.

Thus, quarterly earnings per share doubled to 0.1 sen, from 0.05 sen previously, according to its filing with Bursa Malaysia yesterday.

However, pre-tax profit declined 53.68% to RM4.26 million for 3QFY19 from RM9.19 million last year despite higher revenue growth, no thanks to a 13.89% or RM9.24 million increase in operating expenses (opex) to RM75.74 million, from RM66.5 million.

The higher expenses offset the 6.22% or RM4.57 million revenue growth for the quarter to RM77.97 million, from RM73.4 million.

For the nine months ended March 31, 2019 (9MFY19), GDex’s net profit rose 32.03% to RM22.58 million from RM17.11 million, as revenue climbed 7.62% to RM235.29 million, from RM218.63 million the year before.

Pre-tax profit, however, was down 7.54% to RM28.23 million from RM30.54 million, as opex climbed 13.39% in the period to RM222.11 million.

“The slight improvement in revenue for the current quarter and financial period ended March 31, 2019 was mainly due to contribution from the e-commerce business, despite a slower parcel volume growth currently,” said GDex.

“The decline in profit before tax was mainly due to a deterioration of revenue yield and business margin as a result of the entry of new players with competitive pricing.”

On the challenging market, GDex said it will continue to review its cost rationalisation and operational efficiency while looking at innovative ways to overcome competition.

It will also keep investing in resources and infrastructure “to expand its domestic and regional networks”, besides proactively seeking further strategic investment opportunities to enhance business sustainability.