Pos Msia could buffer fuel cost hike

by **Cals** Fri 06 Sep 2013, 10:51

Pos Msia could buffer fuel cost hike
Business & Markets 2013
Written by Kamarul Anwar
Friday, 06 September 2013 10:12

KUALA LUMPUR: Higher petrol prices would increase POS MALAYSIA BHD []’s operating costs, but the group has made plans to buffer the extra costs, said newly appointed CEO Datuk Iskandar Mizal.

Iskandar, who was appointed to helm the group in July, stressed that the firm is cognisant of the fuel hike’s effect to the operating expenditure (opex) and it was aware that the increase of 20 sen for every litre of fuel could only be the beginning of the government’s effort to trim fuel subsidies.

“Rest assured, we are looking at every possible angle to buffering the inevitability — and the reduction of fuel subsidy is inevitable — like rationalisation of the (delivery) sequence, how and who will go at a particular time or when there is less traffic and so on,” he said.

“When we face a lot of inevitable challenges like the fuel hike, that’s when they (Pos Malaysia’s management) do a lot of value-added activities. There can be other ways that we can effectively and efficiently discharge our responsibility but at the same time we have to look into what we can do to contain the cost,” he told the media after the group’s AGM yesterday.

Iskandar said Pos Malaysia’s transport cost for each fiscal year is about RM120 million, or 13% of the firm’s opex. Its human capital made up the bulk of the opex in its 2013 financial year ended March 31, at 61.4%.

“Our transport costs’ percentage is 13% right now and it could go to 13.5% or 14% in the future. However, we will always find out-of-the-box solutions in trying to contain the costs. But it’s always the top line we’re looking at (to increase),” he said.

Iskandar said by continuing with Pos Malaysia’s five-year strategic plan, the firm will be able to grow its revenue better.

[You must be registered and logged in to see this image.]

Pos Malaysia aims to become a one-stop provider of communications, financial services and supply chain solutions.

“My immediate targets at this point of time is basically on expediting the excellent five-year strategic plan that we have and those are the matters that we are giving a lot of emphasis to,” he said.

Under the five-year strategic plan, introduced last year, Pos Malaysia endeavours to diversify from its product-centric paradigm encompassing mail, courier and retail businesses to becoming a one-stop provider of communications, financial services and supply chain solutions.

Pos Malaysia chairman Tan Sri Mohd Khamil Jamil, who is also DRB-HICOM BHD []’s group managing director, said Pos Malaysia was also eyeing acquisitions of companies overseas.

The firm now has set up an international business division scouring for potential mergers and acquisitions.

“Our international business division is one area that I believe Pos Malaysia can leverage on. We can also leverage on the networking that we have, as well as leverage on DRB-Hicom’s networking,” he said.

Khamil said the firm is in the midst of negotiations with partners in the Middle East, though it is not going to restrict itself by looking for expansion in other territories.

Pos Malaysia’s net profit grew by 18.77% in the first quarter ended June 30 of FY14 to RM43.69 million on revenue of RM355.82 million. A year earlier, the firm raked in net RM36.78 million on revenue of RM311.32 million.

With the earnings growth, Pos Malaysia’s stock grew by as much as 32.25% in the span of five months as it peaked at RM5.29 per share yesterday. On Aug 4, it closed at RM4.99.

This article first appeared in The Edge Financial Daily, on September 06, 2013.