Analysts still cautious on Pos Malaysia's outlook
KUCHING: Analysts still remain cautious on national post and parcel service provider Pos Malaysia Berhad (Pos Malaysia) despite the group continuing to narrow losses, and remains focused on executing its transformation plan and effective cost management.
In the three months ended September 2022 (3QFY22), the group's loss before tax (LBT) reduced by 10.5 per cent to RM36.2 million compared to the RM40.5 million recorded in the same quarter a year ago.
This is despite revenue declining by 8.3 per cent to RM492 million.
Looking at the nine months that ended September 2022, Pos Malaysia saw its LBT narrow by 68 per cent to RM65.9 million visà-vis RM206.0 million in the same period last year, on the back of revenue that declined 10.3 per cent to RM1.49 billion.
Pos Malaysia's group chief executive officer, Charles Brewer said, “The global and local macroeconomic environment is increasingly more challenging, that said the Pos Malaysia team has worked incredibly hard to ensure we continue to chart progress with our transformation.
“We foresee our financial performance outlook will remain challenging, dogged by macroeconomic headwinds that are expected to further depress the already soft post-pandemic e-commerce market.
“Additionally, accelerated in-sourcing by e-commerce marketplaces, aggressive pricing practices and ‘masking' continue to put pressure on parcel volumes, not just for Pos Malaysia but for all courier and logistics players in the country.”
Although Pos Malaysia has plans to mitigate the impact of falling parcel volumes, Hong Leong Investment Bank Bhd (HLIB Research) remained wary over its recovery prospects as the competition in last mile delivery space continue to remain intense, as evident by
Nationwide Express' recent announcement to gradually cease operations.
“Separately, Pos Malaysia and other industry players are also engaging with the regulators, hoping to impose a floor-pricing for the price per parcel, to create a more level playing field for all courier services providers,” it opined.
Along the same vein, Kenanga Investment Bank Bhd's research arm (Kenanga Research) widened its net loss forecasts for FY22 and FY23 by 19 to 59 per cent.
“We are cautious on POS due to its conventional mail business continuing to struggle to stay relevant in the digital age, and we doubt that we have seen the bottom,” it warned.
“Pos Malaysia's declining courier volume as the incumbent has to face tremendous competition from new players such as J&T Express and Ninja Van that undercut aggressively on rates to grow their market shares, Kenanga Research said, adding that Pos Malaysia's cost-cutting measures were insufficient to counter its weakening core business revenue.