KUALA LUMPUR (July 14): Konsortium Transnasional Bhd (KTB) is expected to suffer from a massive drop in revenue in 2020 due to the movement control order (MCO).
In his chairman's statement in KTB's annual report released today, Tan Sri Dr Mohd Nadzmi Salleh said the expected drop in the group's revenue in 2020 was due to a rise in cancellations and passenger refunds resulting from the MCO.
Mohd Nadzmi, who is also KTB managing director, said for the 2020 financial year, the industry has been severely affected in the first half by the Covid-19 pandemic.
"Travel has been restricted for the general public and the public is still in fear of the disease. He noted there were basically no passengers during the MCO.
“Even after travel restrictions were lifted, many people still choose not to travel due to the fear of contagion. We expect this trend to continue until the early part of 2021," he said.
However, Mohd Nadzmi said he believes the industry scenario will change significantly when the government introduces the long-awaited deregulation of the express bus fares as planned.
He said competition under the new system is expected to be more challenging.
The group has prepared a strategic pricing policy upon the deregulation of fare to overcome the expected challenges resulting from the new system, he added.
“The new fare structure will certainly help the group improve its service offerings as well as inject elements of innovation and creativity into its bus operations. However, as the biggest bus operator in the country, any contraction in customer’s demand due to increase in fares would be detrimental to us.
“We are of the view that scheduled fare increases at lower rates over shorter intervals will be more desirable as that will enable the customers to adjust to the new fares,” he said.
Mohd Nadzmi said KTB is optimistic the stage bus sector will be more robust in 2020 with continued assistance from the Federal Government which will enable the group to introduce new and innovative business initiatives to ensure that stage bus service is an attractive mode of transport to commuters.
“We are hopeful that the long-term Stage Bus Services Transformation (SBST) programme will be expanded to other states and we will endeavor to place ourselves in a prime position to operate those services for the Land Public Transportation Agency (APAD).”
KTB on April 14, 2020 had announced that it had triggered the prescribed criteria under the Listing Requirements whereby the auditors had highlighted a material uncertainty related to the company’s ability to continue as a going concern.
Mohd Nadzmi said the company will be submitting its regularisation plan to Bursa Malaysia in due course for approval of the same as required under the Listing Requirements.
"The company is in the midst of formulating a regularisation plan and shall make the necessary announcements in regard to the development on the said matter," he said.
At midday break, KTB shares remained unchanged at 3.5 sen, valuing it at RM14.09 million.