Kitchen sinking drags Pos Malaysia into its largest quarterly net loss

Kitchen sinking drags Pos Malaysia into its largest quarterly net loss
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KUALA LUMPUR (Feb 22): Pos Malaysia Bhd posted its largest quarterly net loss of RM232.35 million, as the postal group made whopping one-off provisions of RM181.1 million in the fourth financial quarter ended Dec 31, 2020 (4QFY20).

This is the 10th consecutive loss-making quarter for the postal group.

In a filing exchange, Pos Malaysia noted the one-off impairment provisions included RM123.3 million goodwill impairment, RM41.6 million provision for Mutual Separation Scheme and RM16.2 million in property, plant and equipment impairment.

The group's net loss of RM232.35 million in 4QFY20 was vastly wider compared with RM7.43 million in the preceding quarter.

Meanwhile, its quarterly revenue shrank 12% quarter-on-quarter to RM544.63 million as revenue from mail and international businesses declined.

There is no yearly comparison as Pos Malaysia changed its financial year end to Dec 31 from March 31 in 2020.

For the full financial year ended Dec 31, 2020 (FY20), the group registered a revenue of RM2.33 billion and a net loss of RM308 million, mainly contributed by the revised postage rates for commercial mail implemented in February 2020 and higher parcel volume due to the increase in online shopping throughout the restriction periods in the year.

Commenting on the group's earnings, Pos Malaysia group chief executive officer Syed Md Najib said the company is currently executing its business recovery plan and is confident that the aviation sector will recover if the pandemic could be brought under control this year.

"We will continue our transformation journey to further improve our position in enhancing customer experience; riding on technology and digitalisation while leveraging on the exponential growth of the eCommerce sector," he said in a statement.

Looking ahead, the group highlighted it will continue to rationalise underutilised mail infrastructure in its ongoing efforts to streamline operations and reduce costs.

"In addition, the company is trialing the concept of a fully crowdsourced last-mile delivery model for the courier business, to be replicated in suitable locations across the nation," it said.

The group also said it will seek further regulatory changes through the National Postal and Courier Industry Laboratory and ultimately aid the company in building a sustainable courier sector.

"Pos Logistics, which serves prominent automotive manufacturers, should benefit from the government's extension for sales tax exemption on cars until June 2021.

"The culmination of the group's initiatives, as well as continuous operations' improvement, should result in improved profitability for this upcoming financial year," it said.

Shares of Pos Malaysia closed unchanged at 98.5 sen, valuing the company at RM771 million. The stock has sunk 18.6% since the beginning of the year.

Kathy Fong