Tasco 3Q net profit slumps on lower earnings from domestic business solutions segment

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KUALA LUMPUR (Feb 21): Tasco Bhd’s net profit more than halved to RM3.14 million for the third quarter ended Dec 31, 2018, from RM8.17 million a year earlier, due to lower earnings from its domestics business solutions (DBS) segment.

Earnings per share was slashed to 1.57 sen from 4.09 sen, the group said in a filing to Bursa Malaysia.

Quarterly revenue fell 3.63% to RM184.69 million from RM191.66 million previously.

The DBS segment recorded a 43.8% decline in profit before tax (PBT) to RM6.2 million from RM11.1 million, said Tasco.

Within the DBS segment, the contract logistics division’s PBT  fell 64.7% to RM3.5 million from RM9.9 million, mainly caused by lower PBT recorded in warehouse & in-plant business.

Tasco also noted that the PBT of warehouse and in-plant business declined by RM5.1 million (151.3%) and RM1.4 million (76%) respectively.

“Low warehouse occupancy in the southern region coupled with high operating expenses incurred for newly secured convenience retail business and reduced revenue from a regional distribution centre in KLIA caused PBT of warehouse business to drop significantly,” Tasco said.

Meanwhile, its haulage business declined by RM500,000 (15.5%), mainly attributable to increase fleet maintenance expenses.

For the cumulative nine months ended Dec 31, 2018, Tasco’s net profit fell 55.16% to RM10.92 million or 5.46 sen per share, from RM24.36 million or 12.18 sen per share last year while revenue was up 3.09% to RM557.43 million from RM540.71 million.

Tasco said the downside risks for the group continue to include rising operational costs — such as labour costs, Sales and Service Tax, higher interest costs and keen competition for cargo in the traditional core businesses.

“We will continue to maintain our strategy to focus on servicing our customers with innovative logistics solutions and expand our logistics capacity when it is beneficial to our shareholders' value,” Tasco added.

Shares of Tasco closed unchanged at RM1.36 today, giving it a market capitalisation of RM272 million. Over the past 12 months, the counter has fallen by 29.2% from RM1.92.