KUALA LUMPUR (Oct 27): NCB Holdings Bhd slipped into the red in the third financial quarter ended Sept 30, 2014 (3QFY14) due to lower cargo handled by Northport.
The logistics and port operator posted a net loss of RM2.3 million or loss per share of 0.5 sen in Q3FY14, compared with a net profit of RM27.27 million or 5.8 sen per share in the previous corresponding period.
Revenue for 3QFY14 declined 11% to RM199.51 million from RM224.56 million. NCB did not declare any dividend for the quarter.
For the nine months ended Sept 30, 2014 (9MFY14), NCB’s net profit shrunk by 90% to RM5.27 million or 1.1 sen per share, from RM56.53 million or 12 sen per share. Revenue sank 12% to RM610.91 million, from RM690.94 million previously.
On segmental basis, revenue for its port and logistic operations in 9MFY14 fell 12% and 11% to RM418.56 million and RM192.35 million, from RM475.04 million and RM215.9 million respectively.
“Container business being the main contributor of revenue, registered a decrease in container handled to 1,888,272 TEUs [20-foot equivalent units], from 2,176,594 TEUs for the same period previous year. The company is currently in various stages of upgrading its wharf facilities, and the full capacity of the expansion is expected to gradually materialize over the short to medium term,” NCB said in a filing with Bursa Malaysia today.
NCB added that its port lease rental was the major contributor for the increase in expenditures, due to the extended footprints under the new lease, adding that initiatives are in progress to extract value from this extended footprints.
On the lower income of its logistic division, NCB said it would continue to take all necessary actions to ensure sustenance of revenue and effective cost management to improve profitability.
“The operating expenditure for the nine months registered a decrease of 19.9%, mainly due to lower cost incurred on outsourced service providers and lower provision for doubtful debts,” it said.
As for its port operations outlook, NCB said it will continue to put in its efforts to improve its container business, with continuous client engagement and retention programs.
“Revenue growth is expected from the improved wharf capacity and is expected to materialise in the short to medium term. However, the company does not expect any significant variation in the performance of the port for the remaining period, till the end of the year,” it said.
On prospect for its logistic operations, NCB said its wholly-owned subsidiary, Kontena Nasional Bhd, is still in the process of rationalising its revenue stream and deployment of assets.
“Revenue from profitable streams are expected to increase, while the revenue for non-profitable streams will cease, according to the rationalisation plan. Management has put in place, several enhanced processes, and will continue to improve its standard operating procedures to increase efficiency, strengthen its financial management and reporting functions. All cost control measures are in place and is expected to reduce the cost of operations,” it said.
Shares in NCB have been on the downward trajectory since October last year, plunging 88 sen or 25.14% year-to-date, to close at RM2.62 today. NCB was at its peak of RM4.70 in October last year.