Friday 29 Mar 2024
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KUALA LUMPUR (May 23): Pos Malaysia Bhd's share price declined as much as 10.76% today after it reported its third straight quarterly loss on Tuesday, which resulted in the group posting its first full-year loss in more than a decade.

At 10.53am, Pos Malaysia was trading down 17 sen at RM1.41 after 3.09 million shares changed hands.

The group reported a net loss of RM141.13 million for its fourth quarter ended March 31, 2019 (4QFY19) compared to a net profit of RM29.03 million the previous year.

Quarterly revenue was also on a downtrend, slipping 8.94% to RM594.68 million from RM653.08 million in the previous year's corresponding quarter.

For the full financial year, the group posted a net loss of RM165.75 million versus a net profit of RM93.25 million in the previous financial year, while revenue for the year declined 4.75% year-on-year to RM2.36 billion from RM2.47 billion.

In a note today, Kenanga Research said the results came in below its expectations, as the postal services segment posted weaker-than-expected performance. Following that, it forecasted a loss of RM15 million in FY20 instead.

The research house maintained its 'underperform' call on the stock, while lowering its target price from RM1.50 to RM1.30.

"We believe Pos Malaysia is suffering from an environment of elevated opex (operational expenditure) at this current juncture. Intensifying competition coupled with continued expansion efforts have led to stagnating margins, thus causing profit deterioration despite volume and revenue growth," Kenanga Research analyst Raymond Choo Ping Khoon said.

"Meanwhile, given Pos Malaysia's inability to close down post offices, coupled with its unionised workforce and losses in its postal services segment, losses are only expected to continue widening moving forward," he added.

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