Terminal operation transports Perak Transit to new highs
WHO would have thought that operating a transport terminal could yield high profit margins?
Given what it has achieved since its listing on Bursa Malaysia four years ago, Perak Transit Bhd appears to have the local transport terminal business figured out.
Chief financial officer Jennifer Chin Yi Teng says last year, 45% of Perak Transit’s revenue was derived from Terminal Meru Raya — formerly known as Terminal Amanjaya — in Ipoh. And because the bulk of its cost had been capitalised, the transport operator realised a whopping gross profit margin of 86%, she reveals.
Buoyed by its success, the company will continue to embark on expansion plans, which include building Bidor Sentral and Terminal Tronoh in the state. Its plans for Terminal Kampar Putra are on track following the receipt of a full certificate of completion and compliance on Aug 7.
Founded by its managing director Datuk Seri Cheong Kong Fitt, Perak Transit started in 2009 as a bus company — a consolidation of three bus services in Ipoh — and began operating its maiden terminal, Terminal Meru Raya, in September 2012.
“Although we are a bus operator, it is just a platform for us to tap into terminal operation. Most of our income comes from the terminal operation,” Chin tells The Edge in an interview.
Executive director Datuk Cheong Peak Sooi, who is Kong Fitt’s brother, says the advertising and promotional (A&P) income from the terminal — particularly outdoor advertising — has helped mitigate the impact of the Covid-19 pandemic on the company.
Even so, he sees continued resilience in domestic travel despite weak consumer sentiment. “Our bus services were only halted for 1½ months during the MCO (Movement Control Order) period. Unlike airports, the impact is likely just 20%. People are still doing domestic travel and schools have reopened. There is not much impact on our terminals,” Peak Sooi says.
Chin points to income certainty from the new Terminal Kampar Putra, which was built at a cost of RM128 million.
“We signed contracts with two advertising agencies; one is in charge of advertising and the other, promotional. We gave them exclusive rights to rent out all the spaces. We only charge them fixed monthly rentals. So, we have a revenue guarantee.”
Terminal Kampar Putra, which has a gross lettable area of 409,000 sq ft, comprises a one-storey bus terminal, five-storey business centre and 11-storey hotel and car park, with facilities such as retail and grocery outlets, a cinema, badminton courts, a bowling alley and a gym.
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