KUALA LUMPUR (Aug 17): Tasco Bhd's first quarter net profit rose 17.22% to RM7.04 million from RM6.01 million a year earlier as it registered higher revenue across its business segments.

Revenue in the quarter ended June 30, 2017 climbed 21.03% to RM156.96 million from RM129.69 million previously, mainly due to higher contribution from both its international and domestic business solutions (IBS and DBS) segments.

In the IBS segment, the air freight forwarding division posted a 27.9% increase in revenue to RM9.4 million on higher export cargoes of electric and electronic (E&E) related products as well as aerospace customers.

Meanwhile, the ocean freight forwarding division saw stronger shipments to the US and Japan from a solar panel customer and an aerospace customer respectively, leading to a 42.5% increase in its revenue to RM8.3 million.

On the other hand, the DBS segment saw a 17.5% increase in contribution from its warehouse division to RM4.1 million. This was boosted by revenue from a new global repair parts business of an E&E customer and a newly secured electrical appliance customer.

Additionally, its haulage division, custom clearance and in-plant businesses, and trucking division recorded higher contributions to revenue.

Going forward, Tasco said improving global and domestic conditions are positive developments for the group, noting that its core logistics business is directly tied to the health of the Malaysian manufacturing sector and international trade.

"Barring any surprises, we expect the group to continue its growth momentum in 2017," the group said.

Downside risks, however, include rising operational costs, particularly via freight rates and labour costs, increased interest costs due to higher borrowings to fund its acquisition of MILS Cold Chain Sdn Bhd, and keen competition for cargo in its traditional core businesses.

Tasco's share price closed down 5 sen or 2% at RM2.45, giving a market capitalisation of RM504 million.