Pos Malaysia lowers loss as transformation plan gains traction


POS Malaysia Bhd narrowed its net loss in the first quarter of 2020 (1Q20) at RM49.2 million from RM141.1 million in the same quarter last year due to its ongoing transformation plan.

In an exchange filing yesterday, the national postal services provider said revenue was 6.1% lower at RM558.5 million due to Covid-19 which had impacted the business.

Pos Malaysia group CEO Syed Md Najib Syed Md Noor said the postal segment revenue was contributed by mail and retail products at RM190.3 million followed by courier at RM178.8 million.

He said average daily parcel volume recorded in April 2020 was approximately 590,000, a 69% increase compared to March 2020 and a 66% increase compared to February 2020.

“The group expects this trend to continue as more consumers adopt online shopping as the new norm. We foresee transshipment volume to resume at a gradual pace, once more countries lift the Covid-19- related restrictions.

“April 2020 saw signs of recovery with transshipment revenue increasing by 84% compared to March 2020, due to the resumption of businesses in China,” he said in a statement.

Stronger demand from e-commerce and online marketplaces, aggressive digital, and traditional sales and marketing drive, as well as improved mid-mile and last-mile efficiency, also contributed to its courier business growth.

The mail business saw an increase in revenue of 1% YoY contributed by the new postage rates revision that was implemented on Feb 1, 2020.

Monthly revenue of mail business increased by RM11 million in February 2020, but saw a decline in mail volume in March 2020 due to the Covid-19 pandemic.

While the e-commerce sector saw a surge in demand for courier services at the end of March, fewer retail transactions were recorded in post offices as customers remained cautious in treading outside their homes.

International business was affected by the cancellation of commercial and cargo flights, as well as suspension of business activities.

Aviation segment contributed RM62.8 million revenue to the group, mainly from cargo and ground handling businesses.

A logistics segment revenue of RM75.5 million was gained mainly from freight management business (freight forwarding and haulage) and automotive business (local automotive production volume).

Other segments consisting of Datapos, Pos Digicert and Pos ArRahnu were not impacted by Covid-19 and were performing above targets.

Syed Md Najib said Pos Malaysia’s ongoing transformation continues to make progress, with the postal segment achieving improved gross profit as the company begins to realise the benefits of its operations improvements, cost efficiency and business focus initiatives.

“E-commerce has and will continue to drive our courier segment. Delivery is a key element in the e-commerce customer journey.

“We believe that automation of our parcel sorting centres and digitalisation efforts in deploying the new track-and-trace system would provide us the competitive advantage and enhance customer experience,” he added.

Meanwhile, the effect of the revised postage rates will soften the financial impact of the decline in mail volume and increase Pos Malaysia’s revenue in the financial year of 2020.

The group expects an incremental annual revenue of RM100 million to RM150 million for the mail business compared to the previous year.

The reopening of businesses, primarily bulk mail operators, and a higher footfall into Pos Malaysia outlets, are expected to provide some improvements to the group’s mail and retail business.

Aviation segment’s recovery is expected to take longer and will depend upon the easing of travel restrictions, border control and imposition of new rules regarding air travel.

The logistics segment is expected to gradually improve with the easing of restrictions and the reopening of the economy.