Two thumbs up on Swift Haulage’s full acquisition
KUCHING: Analysts are upbeat as Swift Haulage Bhd (Swift Haulage) is looking to acquire the remaining ownership in its associated company, BLG Swift Logistics Sdn Bhd (BLG Swift), from BLG Industrielogistik GmbH and Co KG.
Swift Haulage, via its wholly owned Swift Integrated Logistics Sdn Bhd (SILSB), currently has a 60 per cent ownership in BLG Swift.
MIDF Amanah Investment Bank Bhd (MIDF Research) noted that the purchase consideration of RM2.7 million will be satisfied via internally generated funds whereby the deal is to be completed within four months.
BLG Swift and its 100 per centowned subsidiary, Swift Mega Carriers Sdn Bhd (SMCSB), are mainly involved in the provision of warehousing services and car carrier transportation services.
BLG Swift leases the 274,318 sq ft-vehicle distribution centre at SLC Warehouse in Port Klang and an open yard from Swift Haulage for the storage of passenger cars.
“The share of loss in FY21 was attributed to the pandemic which has led to lower demand for warehousing and transportation services to its automotive industry customers whereby the total industry volume (TIV) has fallen by 3.7 per cent year on year (y-o-y),” the analysis said.
“BLG Swift has likely turned to profitability in FY22 on the back of 42 per cent y-o-y growth in TIV. As there is an absence in profits for FY21, the deal is valued at 8.4 times based on its FY20 profit after tax.”
MIDF Research recapped that a relatively recent deal involving an acquisition of a 50 per cent stake in Sabah-based Hypercold Logistics Sdn Bhd (HLSB) in FY21, was valued at 16.3 times. HLSB provides cold-chain logistics services in East Malaysia.
“Swift Haulage should have sufficient funds to take on the deal.
“As at end-3QFY22, Swift Haulage’s cash balance stood at RM21 million, while its gearing ratio is at 0.8 times.
“The proposed acquisition is not expected to materially impact the earnings.”