KUALA LUMPUR (Feb 27): Continued decline in snail mail volume and sharply lower contribution from its logistics division have kept Pos Malaysia Bhd in the red for two consecutive financial quarters.

The postal group, whose share price has halved over the past 12 months, announced this evening it posted a net loss of RM13.02 million or 1.66 sen a share, for the third quarter ended Dec 31, 2018 (3QFY19). It posted a net profit of RM9.48 million or 1.21 sen a share in the previous corresponding quarter.

Notably, Pos Malaysia’s net loss in the preceding quarter was the first quarterly loss in nearly 10 years.

Quarterly revenue dropped 6.36% to RM581.24 million from RM620.72 million last year, it said in a filing with Bursa Malaysia today.

“Operating conditions remain challenging for the Pos Malaysia group as a whole,” said Pos Malaysia’s group chief executive officer Syed Md Najib Syed Md Noor, in a separate statement today.

“The traditional mail business which is part of our universal postal services obligation for the government continues to be saddled with high operating costs and increased migration onto electronic and digital media by commercial customers,” he added.

For the cumulative nine months ended Dec 31, 2018, Pos Malaysia registered a net loss of RM24.62 million or 3.14 sen a share, versus a net profit RM64.22 million or 8.2 sen a share last year. Revenue was down 3.25% to RM1.76 billion from RM1.82 billion a year ago.

Overall, on prospects, although the group is cautiously optimistic about some of its businesses, Pos Malaysia said the group’s key revenue generators, Postal Services and Courier businesses, remain challenging as business enterprises are increasingly communicating with their customers via electronic and digital channels, foregoing mail-based communications.

Firm steps are being taken to address the shrinking snail mail volume but the outcome of these steps will only be evident in the medium term, said Pos Malaysia.

Moving forward, Syed Md Najib said Pos Malaysia has embarked on a multi-pronged retail transformation program to revamp the postal network in order to build a sustainable universal service business model.

“The transformation will involve right-sizing our postal infrastructure, introduction of digital technology for self-service applications and the expansion of our parcel processing capacity,” he noted.

Syed Md Najib added that Pos Malaysia is also investing in automation and digital platforms to increase operational efficiency and offer customers a higher level of convenience with a more satisfying customer experience.

Pos Malaysia’s shares closed up eight sen or 3.94% at RM2.11 today, raising its market capitalisation to RM1.65 billion. Over the past 12 months, the stock has fallen 51% from RM4.32.