KUALA LUMPUR (Aug 22): Logistics companies CJ Century Logistics Holdings Bhd and Tasco Bhd both saw a sharp decline in performance for the quarter ended June 30, 2019.

Tasco saw its net profit drop 75% to RM1.28 million for its first quarter from RM5.07 million in the previous year’s corresponding quarter, while revenue fell slightly to RM180.4 million from RM181.64 million.

Meanwhile, CJ Century saw its second consecutive quarterly loss, reporting a net loss of RM3.04 million for its second quarter, versus a net profit of RM2.77 million in the previous year’s corresponding quarter.

This was despite a 31% jump in quarterly revenue to RM136.74 million from RM104.01 million in the previous year.

For the cumulative half-year period, net loss stood at RM4.84 million against net profit of RM5.42 million recorded in the similar period a year earlier.

Both logistics players cited lower margins in certain business segments impacting their performance for the quarter.

Tasco saw lower gross margins amid stiff competition in the trucking and air freight forwarding sectors, it said, while the cold supply chain logistics business was affected by an internal reorganisation.

“Our bottom line continues to be impacted negatively due to the more competitive market environment resulting in reduced margins and the continued (albeit reducing) loss in our convenience retail sector,” said the group.

Meanwhile, CJ Century’s total logistics services division posted lower profit due to lower margins from certain operations, particularly the oil logistics segment.

Its courier services segment made a loss amid costs incurred as the group continues to expand its operations nationwide.

The group expects the operating environment to remain challenging going forward amid cost challenges.

However, it remains committed in expanding its last mile solutions to improve delivery capacity.

“In the meantime, the courier services segment is expected to continue recording losses until the operation is stabilized and volumes handled improve further. The new auto-sorter, which has recently been installed at the new Bukit Raja Distribution Centre, will have a sorting capacity of 50,000 parcels per day once it is commissioned end of September 2019.

“New lines will be installed over the course of the next two years to increase sorting capacity to 200,000 parcels per day by 2021,” said CJ Century.

While the group is confident of the growth of its last mile solutions, it expects its financial performance to remain under pressure.

Tasco’s share price closed unchanged at RM1.20, giving it a market capitalisation of RM240 million.

CJ Century closed 0.5 sen or 1.25% higher at 40.5 sen, translating to a market capitalisation of RM159.66 million.