CEO Morning Brief

Teleport Plans to Buy Seven More Freighters to Deliver Two Million Parcels Daily by 2025

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Publish date: Tue, 14 May 2024, 10:14 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (May 13): Teleport, Capital A Bhd’s (KL:CAPITALA) wholly owned logistics arm, is planning to boost its network with seven more air freighters, as it targets to increase the volume of parcels it delivers daily to two million by end-2025, from 130,000 parcels a day at end-2023.

This operational scale-up will make the company on a par with global express players, said Teleport chief executive officer Pete Chareonwongsak.

Teleport's current network comprises three narrow-belly air freighters, the belly capacity from AirAsia’s enlarged aviation umbrella, and over 30 other global airline partners. The company's daily parcel volume rose to 170,000 by the end of the first quarter of this year.

Demand is not a concern, Pete said, based on the volumes leaving China’s borders en route for Southeast Asia daily.

The question that remains is capturing that demand, which he believes Teleport will be able to do with lower delivery costs that come with its scaling-up plans.

“With a certain scale, we will be able to actually reduce the cost of delivery by a factor of 10. With that, we expect to be aggressive in trying to attract up to two million parcels a day,” he told a media briefing on Monday.

“Now what’s key is that a lot of these e-commerce parcels come from China — more than two million in fact. So, a key focus market for us is China, as we realise that’s where the source of volume is, so we want that to flow through Teleport,” he added.

According to him, the company already has a market share of 13% to 15% of air cargo volume in Southeast Asia, but less than 10% of the e-commerce delivery market share. Nonetheless, he said Teleport already holds the market leader position with these figures.

For the financial year ended Dec 31, 2023 (FY2023), Teleport logged a pre-tax profit of RM18.2 million on a revenue of RM731.91 million, based on a daily parcel volume of 130,000.

On a potential listing in the US, Pete said this is a matter to be considered after the company achieves the target of two million parcels per day.

“On plans for an initial public offering, I think if we deliver two million [parcels] per day, I think you could do the maths on how big that kind of business actually ends up being,” he said.

Shares in Capital A ended half a sen or 0.58% higher at 87 sen on Monday, valuing the group at RM3.68 billion.

Source: TheEdge - 14 May 2024

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