By NURUL SUHAIDI / Pic Source: swiftlogistics.com.my
SWIFT Haulage Bhd is set to focus on leveraging its core competencies and strengths in integrated logistics to address business opportunities and grow its business.
Public Investment Bank Bhd (PublicInvest) stated further expansion will be attained through strengthening and expanding its operational facilities including warehousing and container depot as well as expanding its fleet operations.
The Main Market bound integrated logistics group’s core earnings of RM555.8 million in the financial year 2020 (FY20) decreased 8.9% from RM610.2 million in FY19 due to the Covid-19 pandemic.
Swift Haulage’s revenue and earnings recovered by RM24.4 million or 10.9% to RM248.5 million in FY21 due to higher contribution from the container haulage segment because of higher twenty-foot equivalent units (TEUs) delivered and lesser impact from Movement Control Order 2.0.
The investment bank has put a fair value of RM1.16 per share on Swift Haulage, above its offer price of RM1.03 a share.
The logistics service provider is headquartered in Malaysia and has operations in Thailand that are focused on cross-border transportation and freight forwarding. Its integrated logistics operations are supported by its fleet operations in Malaysia and Thailand including 1,546 prime movers, 5,518 container trailers, 811 box or curtain-sider trailers, 53 trucks and 42 compressed natural gas tankers.
The group operates warehouses with a total storage capacity of 849,371 sq ft and container depots with a total capacity of 28,500 TEUs.
According to the PublicInvest report yesterday, Swift Haulage plans to expand its commercial vehicle fleet by purchasing 30 new prime movers for RM12 million, financed with its listing proceeds.
The group also intends to buy land and construct a new warehouse in Port Klang Free Zone in Selangor.
For the expansion of its cold chain logistics assets, Swift Haulage intends to expand recently-acquired Hypercold Logistics Sdn Bhd’s (50% equity interest) existing cold-chain facilities by expanding its cold-chain storage capacity from 3,000 pallets to 4,500 pallets.
The total estimated cost of this expansion is RM6 million of which the group’s portion is RM3 million based on a 50% equity interest.
Hypercold Logistics has obtained the approval for the building plan to construct the additional cold-chain warehouse space but has yet to commence construction.
“The construction works are targeted to begin in December and expect to complete construction by the 3Q22,” PublicInvest stated.
The report highlighted a few key downside risks which potentially disrupt the business operation which include the competition from a large number of operators in the industry, shortage of drivers, the threat of cargo hijacking and theft incidents, an increase in diesel prices which may reduce profitability and fluctuations in interest rates.
Swift Haulage expects to complete the acquisition of the Bandar Sultan Sulaiman land by the 4Q21 following the continuation of leasing the Bandar Sultan Sulaiman Land to the two existing tenants.
The group registered a market share of 6.5% of container haulage services in 2020.
PublicInvest is forecasting revenue growth of 15%/20% for FY22/23F respectively, mainly driven by Swift Haulage’s expansion plans.
“In terms of profitability, we are projecting a 20%/19.3% increase in PATMI for FY22F/F23F respectively mainly due to higher revenue, savings in finance cost and better efficiency,” the report noted.
Swift Haulage is scheduled to list on the Main Board on Dec 21.