Malaysian businesses agile, geared up for recovery — Grant Thornton
13 Jul 2020
Malaysian businesses have shown signs of resilience despite the negative impact of the COVID-19 pandemic, according to Grant Thornton’s latest International Business Report (IBR) data.
Grant Thornton Malaysia PLT country managing partner Datuk Narendra K. Jasani said the research, conducted in May and June, found that only one per cent of respondents in Malaysia said they expected to cease trading as a result of the crisis.
“(A total of) 86 per cent of businesses expect to continue trading based on their existing financial situation, while 56 per cent said they can continue to trade using existing funds but would need to cut costs and/or restructure,” he said in a statement today.
Meanwhile, eight per cent said they would need to supplement cost-cutting and restructuring with access to new funding from lenders, investors or government grants, he said.
“(Businesses in Malaysia) are agile and have taken active steps during lockdown particularly in adjusting their business strategy and managing their cashflow,” Jasani said.
Grant Thornton’s IBR data tracks the health and outlook of the global mid-market. The research provides insight into the views and expectations of more than 10,000 businesses across 30 economies.
While 70 per cent of mid-market businesses in Malaysia said COVID-19 would hit their 2020 revenues, the data suggested “the impacts on the mid-market fall short of the predictions of the wider economy,” Grant Thornton said
“Thirty-six per cent of businesses anticipate a decline of less than 20 per cent revenues while 34 per cent expect a greater than 20 per cent fall,” the professional services firm said.
The IBR data showed that 70 per cent of businesses had made significant and fundamental changes by adjusting their business strategy to meet the transformative nature of the new trading environment, while 63 per cent of businesses had changed working patterns within operations.
“Given the nature of the pandemic, it’s little surprise that slightly over 60 per cent of businesses implemented flexible working arrangements.
“Generally, companies were more likely to change strategy in sectors where significant revenue losses were expected,” Grant Thornton said.
In terms of fund-seeking, it said slightly over 30 per cent of businesses sought for government grants and had spoken to lenders about new credit, while 37 per cent sought financial support from investors.
“To stop further losses, 37 per cent of businesses acted to this pandemic by reducing or suspending operations and 33 per cent reduced labour costs through cutting pay, staff or both,” it added.