Pos Malaysia sinks to the red in Q4
PETALING JAYA: Pos Malaysia Bhd posted a net loss of RM141.23 million for the fourth quarter ended March 31, 2019 compared with a net profit of RM29.03 million a year ago mainly due to lower revenue contribution from courier and logistics segments, higher other expenses from impairment loss on goodwill and an increase in cost of sales and operating expenses.
The group’s revenue dropped 8.9% to RM594.68 million compared with RM653.08 million in the previous year’s corresponding quarter.
For the full year period, Pos Malaysia saw a net loss of RM165.75 million compared with a net profit of RM93.25 million a year ago due to lower revenue registered from logistics segments, postal services and international segments, lower other income mainly from lower net foreign exchange gain and increase in cost of sales and operating expenses as well as other expenses mainly from impairment loss on goodwill.
Its revenue fell 4.8% to RM2.36 billion compared with RM2.47 billion in the previous year.
The group’s business outlook going forward remains generally challenging. One major challenge is the continuing contraction in mail volume as business enterprises are increasingly communicating with their customers via electronic and digital channels, foregoing mail-based communications.
“For our postal services, the high cost of maintaining the nationwide postal network associated with universal service obligations coupled with the year-on-year drop of 13% in mail volume is affecting the sustainability of the traditional mail business. The group is engaging the regulator for a more sustainable pricing model to address the high cost associated with universal service obligations. The group is expecting a positive outcome from this engagement,“ Pos Malaysia said.
The courier business remains a profitable and growing segment for Pos Malaysia. The challenge however is to improve operational efficiency to better realise the growth in this segment. The group is concentrating on the last mile where improvements are being made to existing delivery capacity.
Investments in automation and digital technology are also being made to enable higher operational efficiencies and to provide value added services as a differentiator vis-à-vis competitors. The group is looking at providing a comprehensive platform to SME to tap into the growth of the SME industry. Higher revenue and better cost efficiencies are expected from these activities.
The growing cross-border e-commerce volume is the key driver of international business and has contributed to higher cross-border volumes. The group believes that even though margins are challenging, there is still ample growth in this segment.
Pos Logistics seeks to secure more medium to long term contracts for better returns. The outlook looks positive in the future.
The increase in air freight volume and higher airline passenger traffic have resulted in improved performance from the aviation business and this trend should persist in the short to medium term.
Overall, although the group is cautiously optimistic about some of its businesses, the group’s core businesses namely postal services and courier, continue to operate in a challenging environment. Firm steps are being taken to address these issues but the outcome of these steps will only be evident in the medium term.