Pos Malaysia’s project higher net losses for FY20-21F
KUALA LUMPUR: Pos Malaysia Bhd’s (Pos Malaysia) net losses for financial year 2020 to 2021 forecast (FY20-21F) have been projected to be higher as a result of the suspension of operations and slower demand amids the Covid-19 pandemic.
Pos Malaysia recently announced that international mail and parcel services are suspended temporarily due to service disruptions to all destination countries except China, Hong Kong, Japan, Singapore and the UK, effective March 30, 2020.
“This is due to the cancellation of flights, airport closures and the preventive measures to curb the spread of Covid-19 at the respective destination countries,” the announcement read.
Meanwhile, Express Mail Servcie (EMS) remains available as the partners are still able to transport the items, but to limited destination countries.
AmInvestment Bank Bhd (AmInvestment Bank) has now projected greater contraction of 35 per cent in mail volume in FY20F, versus in the low 20s the research firm assumed previously, as it believed the decline in commercial mail volume (which makes up around 90 per cent of the total mail volume) will accelerate further with businesses stepping up on cost-cutting initiatives as revenues fall off the cliff.
“We also expect some volume losses on the back of business consolidation amid the economic downturn,” AmInvestment Bank said.
“We project net losses of RM90 million and RM24 million in FY20-21F and a net profit of RM31 million in FY22F, versus a net loss of RM22 million in FY20F and net profits of RM31 million and RM44 million in FY21-22F previously, largely to reflect lower revenues due to the company’s suspension on some of its’ operations and slower demand amidst the Covid-19 pandemic.”
The research firm believed the main challenge for the company is its cost inefficiency as a result of a unionised workforce and its inability to significantly rationalise its extensive network of post offices.
“Not helping either, is the revenue loss with scaled down operations amidst the Covid19 pandemic. Meanwhile, the courier segment continues to face intense competition, resulting in margin squeeze.