Pos Malaysia suffering from elevated opex — Analysts
KUCHING: Pos Malaysia Bhd (Pos Malaysia) is suffering from an environment of elevated operating expenditure (opex), with some analysts believing that the national postal delivery service’s outlook remains challenging in the short term.
Earlier this week, Pos Malaysia announced a loss before tax of RM15.5 million for the first quarter of financial year 2019 (1QFY19) compared to a profit before tax of RM13 million in the preceding quarter.
“We believe Pos Malaysia is suffering from an environment of elevated opex at this current juncture,” the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said.
“Intensifying competition coupled with continued expansion efforts have led to stagnating margins, thus causing profit deterioration despite volume and revenue growth.
“Meanwhile, given Pos Malaysia’s inability to close down post offices, coupled with its unionised workforce and losses in its postal services segment, losses are only expected to continue moving forward.”
According to Kenanga Research, the courier business continues to operate in a competitive environment pressured by price and cost challenges.
The research arm highlighted that the group continues its efforts to manage cost whilst increasing operating efficiency.
“The Integrated Parcel Centres (IPC) in Shah Alam and newly completed facility in KLIA has increased the processing capacity by 77 per cent from 300,000 to 530,000 parcels per day.”
On Pos Malaysia’s outlook, AmInvestment Bank Bhd (AmInvestment Bank) noted that it remains challenging in the short term.
“Although we note Pos Malaysia’s efforts to address its issues and improve its efficiencies, its outlook still remains challenging in the short term as its key revenue drivers which are its postal and courier segment (contributing 26 per cent and 39 per cent of group revenue respectively) continue to face headwinds,” the research firm said.