Tasco 1Q net profit falls 28% on higher costs

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KUALA LUMPUR (Aug 16): Tasco Bhd's net profit fell 28% to RM5.07 million for the first quarter ended June 30, 2018 (1QFY19), from RM7.04 million a year earlier.

The logistics firm said earnings were affected by additional costs incurred, including higher finance costs of RM2.7 million and stamp duty of RM600,000 on loan facility agreement of funding the newly-acquired cold storage firm Gold Cold Integrated Logistics Sdn Bhd (GCIL). 

Tasco said its quarterly revenue, however, climbed 15.72% to RM181.64 million from RM156.96 million previously (1QFY18), mainly due to higher contribution from its domestic business solution segments, with maiden contribution from the new acquisition of GCIL. 

“Revenue from domestics business solutions segment remained robust by recording a 41.3% or RM35.4 million increase in revenue from RM85.9 million to RM121.5 million year-on-year,” it said in a filing with the local bourse today, adding that GCIL contributed a revenue of RM21.1 million to the segment.

On June 1, Tasco completed the acquisition of GCIL for a cash consideration of RM 9.93 million and RM19.20 million shareholder’s loan. 

For its international business solutions segment, the group showed a decrease of 15.2% or RM10.8 million in revenue to RM60.2 million during the quarter, against RM71 million previously. 

In that segment, the air freight forwarding division posted a marginal increase of 0.1% in revenue to RM43.02 million.

Meanwhile, the ocean freight forwarding division’s revenue dropped 39.9% or RM10.9 million to RM17.1 million, against RM28 million a year ago.

On prospects for the rest of the year, the group said it expects to build strongly into the retail logistics business, apart from its core traditional logistics and cold supply chain businesses.

“We will continue to maintain our strategy to focus on servicing our customers with innovative logistics solutions and expand our logistics capacity, when it is beneficial to our shareholders' value,” Tasco said.

However, the downside risks for the group include rising operational costs (in particular labour costs and impact from new Sales and Service Tax), higher interest costs and keen competition for cargo in its traditional core businesses, the filing added.

Tasco’s share price closed higher by one sen or 0.58% at RM1.72 today, for a market capitalisation of RM344 million.