Pos Malaysia 2Q profit falls 16% on escalating costs

by **Cals** Fri 21 Nov 2014, 01:58

Pos Malaysia 2Q profit falls 16% on escalating costs

KUALA LUMPUR (Nov 20): Escalating transport costs and wages has crimped Pos Malaysia Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)’s net profit for its second quarter ended Sept 30, 2014 (2QFY15). The postal group saw a 15.56% drop year-on-year to RM33.99 million. The margin squeeze was perceptible as its revenue grew 17.25% to RM371.67 million, from RM316.98 million.
In a filing with Bursa Malaysia, Pos Malaysia showed its operating profit for 2QFY15 was RM46.01 million, which indicated a margin of 12.38%. To compare, the previous corresponding quarter’s operating profit was RM49.87 million, translating to a margin of 15.73%.
Pos Malaysia’s cumulative net profit for six month ended Sept 30 stood at RM61.101 million or 11.38 sen per share, down 27.21% from the previous corresponding period’s net profit of RM83.94 million or 15.63 sen per share. Just like in the latest quarter, Pos Malaysia’s revenue for 1HFY15 registered a 10% increase year-on-year to RM740.06 million.
Pos Malaysia, which is 32.21%-owned by Tan Sri Syed Mokhtar Albukhary’s DRB-Hicom Bhd, said growth came even when there was a one-off boost from last year’s General Election.
“Excluding the said one-off contribution, revenue growth stood at 11.9% on an annualised basis, which outperformed the 8.1% growth registered in the same period in FY13,” the group said in its explanatory note for 2QFY15’s financial statement.
“Nevertheless, in line with the transformation programme of Pos Malaysia as well as to gear up for future growth, series of initiatives had been implemented leading to higher expenditure during the period under review,” Pos Malaysia commented on the profit drop.
It said the primary contributors to the higher expenses comprised higher staff costs and transport charges. “The former refers to strengthening of growth segments such as PosLaju and over-the-counter Financial Services at post offices,” said Pos Malaysia.
As for the rising transport charges, the group said it had to incur higher expenses for cross-border postal charges due to the growth in the newly set-up transshipment business, and increase in air freight charges relating to Universal Service Obligation under the Postal Services Act 2012.
Going forward, Pos Malaysia said it expected the key drivers for its growth to come from continuing domestic demand, and an increasing trend in e-commerce transactions.
“This growth augurs well for demand of Pos Malaysia’s offerings, such as in the areas of domestic and international courier and parcel as well as financial services,” said the group.
The group’s outlook for its FY15’s financials remained satisfactory, Pos Malaysia concluded. Its share price closed eight sen or 1.63% higher today at RM4.98, with a marginal trading volume of 9,700. Pos Malaysia had a market capitalisation of RM2.67 billion.