SUBANG JAYA: Integrated Logistics Bhd (ILB), which posted weaker earnings for financial year 2007 (FY07), expects to perform better in FY08 on higher contribution from its strategic investments in China and Dubai.
Chairman Datuk Lee Hwa Beng said 2007 was a “good turning point'' for ILB as the company achieved notable milestones by venturing into several strategic investments in China and Dubai, some of which would have positive impact on its financial performance in 2008.
ILB was banking particularly on its China operations to be the main contributor to group revenue for the next three years, he told reporters after the company AGM yesterday.
“We expect the group's strategic investments in several projects in China to contribute to the bottom line when implemented and operational within the next three years,” he said.
The logistics provider's China projects range from warehousing to chemical logistics at Yangtian Port in Guangdong province, Yangshan Port in Shanghai, and the Futian Free Trade Zone in Shenzhen. It is also scouting for projects in new growth areas near Shanghai and Suzhou.
ILB is also building a RM200mil warehouse in Dubai's Jebel Ali free trade zone, which is expected to be completed by end-2009.
The company's presence in Dubai was part of an organic expansion plan that allowed ILB to leverage on its third party logistics warehousing expertise, Lee said, adding that the project was expected to generate “significant contribution” when completed.
For FY07, ILB posted pre-tax profit of RM14.9mil versus RM31.7mil previously.
Revenue was also weaker at RM190.8mil compared with RM197.8mil in FY06.
In its annual report, ILB said during FY07, the price of crude oil peaked at almost US$100 per barrel compared with US$75 a barrel in 2006.
It said the impact of rising crude oil prices and other indirect costs had caused most manufacturers, exporters, traders, logistics providers and other businesses to rationalise their operating costs.
“The rationalisation had affected supply chain management in transportation, storage and distribution to consumers and created intense competition among local and global logistics providers.
“This resulted in weaker demand for warehousing, forwarding and haulage services, particularly in Malaysia, as more logistics players enter the market,” the report said.
