Pos Malaysia’s earn­ings fore­casts low­ered

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: Pos Malaysia Bhd’s earn­ings fore­casts have been slashed by up to 8%, due to larger than ex­pected losses from its postal ser­vices busi­ness seg­ment.

Hong Leong In­vest­ment Bank (HLIB) Re­search cut Pos Malaysia’s earn­ings fore­casts for the fi­nan­cial years end­ing 2017, 2018 and 2019 (FY17/18/19) by 5%, 8% and 5% re­spec­tively, to ac­count for the weaker postal ser­vices rev­enue and prof­itabil­ity, fol­low­ing six-month net profit that came be­low ex­pec­ta­tions.

“Re­ported Q2FY03/17 core net profit of RM5.7 mil­lion and 6MFY03/17 at RM34.7 mil­lion, ac­count­ing for 38.4% of HLIB ex­pec­ta­tion for FY16 and 38.8% of con­sen­sus,” it an­a­lyst Lim Sin Kiat said in a re­port last Fri­day.

Lim said the group con­tin­ued to be af­fected by the weak­ness in con­ven­tion mail vol­ume, while the in­ter­na­tional trans­ship­ments busi­ness is rel­a­tively sea­sonal and op­por­tune with low mar­gins.

How­ever, he said the courier seg­ment con­tin­ues to grow as courier ser­vices de­mand is ex­pected to im­prove in the com­ing years due to the boom in ecom­merce.

The group’s cu­mu­la­tive core profit af­ter tax and mi­nor­ity in­ter­ests in the first half rose 14.7%, un­der­pinned by stronger courier vol­ume growth due to higher e-com­merce trans­ac­tions year on year.

HLIB Re­search down­graded Pos Malaysia to “sell” from “buy”, with a lower tar­get price of RM3.36, from RM3.87 pre­vi­ously, post earn­ings cut based on un­changed 20 times FY18 price-earn­ings ra­tio.

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