Higher operating expenses erodes Pos Malaysia's 1Q earnings

by **Cals** Mon 24 Aug 2015, 23:28

Higher operating expenses erodes Pos Malaysia's 1Q earnings

KUALA LUMPUR (Aug 24): Pos Malaysia Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) posted a 16.1% decline in net profit to RM22.74 million or 4.23 sen per share for the first financial quarter ended June 30, 2015 (1QFY16), from RM27.11 million or 5.05 sen per share a year ago, due to higher operating expenses.
This was despite revenue for the quarter increasing 5.8% to RM390.37 million in 1QFY16, from RM368.8 million in 1QFY15, primarily driven by the trans-shipment business from the mail segment.
In a filing with Bursa Malaysia today, Pos Malaysia said it registered higher expenses by RM26.8 million in 1QFY16, compared with the preceding period, primarily due to staff and transportation costs.
"Staff cost increase corresponds with the overall increase in revenue.
"The other significant increase is from transportation cost primarily involving higher international volume in line with the group’s focus in capitalising the global trend of cross border e-commerce merchandise transactions," it said.
Going forward, Pos Malaysia said the group's courier, express and parcel business remains the key driver of the group's revenue growth.
It added that the sustained growth in e-commerce activities is also a positive development for the group and as such, it expects its current financial performance for the year ending March 31, 2016 to remain satisfactory.
Pos Malaysia (fundamental: 2.5; valuation: 0.8) shares closed three sen or 0.76% lower at RM3.90 today, for a market capitalisation of RM2.09 billion.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)