KEX eyes net operating cash break-even in 12 months

SET-listed KEX Express (Thailand), formerly known as Kerry Express, wants to reach the break-even point for net operating cash within 12 months by focusing more on express international delivery and maximising operational efficiency.
“A return to profit is always our target. The market is still uncertain and depending on the latest development, we will continue to be agile, adapting to market demands. We hope to achieve this as soon as possible,” said Leon Chow, chief financial officer of KEX Express (Thailand), at the SET Opportunity Day on Friday.
“We’ll do it step by step. Our first goal is to ensure our net operating cash can break even, then cash flow from operations, within the next 12 months.”
He said KEX needs to diversify businesses and reduce dependence on e-commerce platforms, as some of them have their own delivery arms.
The company wants to focus on retaining and attracting more mid-level to high-end customers in different segments, including customer-to-customer, business-to-business and business-to-customer, said Mr Chow.
“Lastly, we need to develop regional and international businesses as well as one-stop logistics capabilities in the company’s network,” he said.
Mr Chow said KEX and its major shareholder SF International Holding (Thailand) are committed to Thailand and Southeast Asia, with KEX Thailand an important part of its regional and international strategy.
SF International Holding (Thailand) is an indirect subsidiary of SF Express, the major integrated logistics provider in China and Asia.
KEX’s recent completion of a rights offering transaction will ensure the company’s success in Thailand and help make the company sustainable, he said.
According to its recent filing to the Stock Exchange of Thailand (SET), KEX completed the rights offering transaction in August with a total of 1.76 billion shares or around 5.64 billion baht.
This strong commitment from its shareholders helped to enhance its balance sheet strength and liquidity flexibility, supporting its operations with a view to long-term sustainable growth, according to the filing.
KEX’s primary objective is still to improve operation quality and profitability, said Mr Chow.
Over the past few years, the Thai market has been highly competitive, especially in terms of pricing, he said.
KEX wants to diversify its revenue streams and pays close attention to pricing practices that may be unreasonable, which will be a key part of its strategy moving forward, said Mr Chow.
The company’s strategy rejig is in line with the SF group’s plans for a pan-Asian logistics platform, offering one-stop solutions to targeted customers, while differentiating its services and customised pricing to improve revenue performance.
As of the third quarter this year, KEX had 17,506 employees, down 10% from the previous quarter.
According to its SET filing, KEX reported a net loss attributable to the company owners of 1.04 billion baht in the third quarter this year, reflecting an improvement of 3% quarter-on-quarter, but a wider loss of 15% year-on-year, mainly based on income tax adjustment.