Dwindling mail and impairments drag Pos Malaysia into the red
Pos Malaysia Bhd posted a revenue of RM594.7 million for the fourth quarter of this financial year, an 8.9% drop compared to RM653.1 million recorded in the corresponding quarter last year.
For the full financial year, the company’s revenue stood at RM2.36 billion, lower than RM2.47 billion recorded in the last financial year.
The company said the decrease was largely due to continued weak mail, international and logistics business performance at Pos Malaysia and Pos Logistics Bhd.
For the full year, profit before tax plunged from RM117.3 million a year ago to a loss before tax of RM158.4 million.
The company also recorded a net loss of RM141.1 million for the quarter compared to a profit of RM29 million a year ago. The company’s total lost for the financial year under review was RM165.7 million.
The group attributed the losses to impairment charges of RM39.6 million from the loss of goodwill in Pos Logistics.
The losses were also contributed by the double-digit contraction in mail volume and bill payments as consumers and companies substituted traditional letters with electronic media.
The impairment of goodwill in Pos Logistics is a result of performance that is below expectations due to competitive market conditions, according to the company in a statement.
Pos Malaysia group CEO Syed Md Najib Syed Md Noor said the loss was a result of continuing decline in mail volume which was 13% year-on-year, coupled with the high costs serving the Universal Service Obligation.
“We are working closely with the regulator for an overall tariff rebalancing to update the tariff that was last changed in 2010 accordingly to reflect the growing costs to serve the nation with an increase of 17% new postal addresses (8.9 million addresses recently compared to 7.6 million in the last five years).
“We expect a positive outcome from the regulators on the tariff rebalancing. An impairment was also made for goodwill in Pos Logistics due to increasing competition, which has resulted in performance that is below expectations. This impairment is a one-off expense,” he said.
“Pos Malaysia will make significant investments for its digital transformation and expansion of its capabilities to serve the growing e-commerce demand,” he said, adding that one of the initiatives is the launching of the company’s second Integrated Parcel Centre in the Kuala Lumpur International Airport. The centre will increase its capacity by 78% to 530,000 daily from 300,000. The company is also spending RM100 million on its core systems to enhance the overall customer experience on digital technology.
The company’s outlook for e-commerce and Pos Malaysia over the next few years is very promising.
The group expects double-digit growth to continue as more people shop online in Malaysia.