Pos Malaysia looks to online shopping to boost 4Q performance

by HARIZAH KAMEL / pic by HUSSEIN SHAHARUDDIN

POS Malaysia Bhd stated that the growth in e-commerce retailing due to the Conditional Movement Control Order will help drive its fourth quarter (4Q) performance as its transformational programme gains traction.

The reinstatement of partial movement restrictions in October should result in an increase in online shopping and will likely have a positive impact on its courier business, the postal and logistics group noted.

“We foresee parcel volume will be high in 4Q driven by the 11.11 and year-end online sales. However, we anticipate a reduction in footfall into our post offices, which should result in a dip in retail business revenue,” Pos Malaysia stated in a release yesterday.

It noted that mail volume continued to decline, but at a much slower rate than expected after the implementation of new postal tariffs.

Pos Malaysia maintained its initial projection that the new postal tariffs will contribute positively to its bottom line.

Additionally, Pos Logistics Bhd is expected to benefit from the recent launch of a new car model from a local car manufacturer and should see increased demand for automotive logistics services.

Pos Malaysia’s revenue in 3Q ended Sept 30, 2020 (3QFY20), grew by 13.3% year-on-year (YoY) to RM623 million, while net losses decreased by 74.7% YoY to RM7.4 million.

Revenue growth in 3Q came from the mail and retail businesses of the postal and logistics segments.

The group’s transformation continued to make progress as the group recorded RM100,000 profit from operations in 3Q, following losses from operations for eight consecutive quarters.

For the cumulative nine-month period ended Sept 30, 2020, the group recorded a net loss of RM75.7 million, while revenue stood at RM1.79 billion.

Group CEO Syed Md Najib Syed Md Noor said as part of its transformation plan, Pos Malaysia aims to further improve efficiency and manage its costs.

“We have installed new semi-automated processing systems in five distribution centres in 3Q and to date have a total of 31 semi-automated distribution centres. The move to automate our processing facilities is a big part of our transformation plan to scale up our processing capacity and efficiency.

“This initiative, coupled with our delivery rider crowdsourcing programme, will enable us to handle more parcels in the future and improve delivery timeliness,” he said in a statement.

He added that Pos Malaysia acknowledged the high level of uncertainty the Covid-19 pandemic has brought about not just to its business, but to the economy and society.

Likewise, the group will continue to ensure the safety of its people and remain vigilant in ensuring its business continues to support and serve the nation during these challenging times.

“Our aim is to ensure our transformation initiatives cater to the change in consumer behaviour and create opportunities for local e-commerce players,” he added.

Its new track and trace system, which will provide customers improved parcel tracking visibility and enhance its courier operation’s capabilities, is expected to be fully operational in 4QFY20.

In an exchange filing yesterday, the postal and logistic service provider stated that it has begun rationalising underutilised mail infrastructure, beginning with the consolidation of its mail processing centre in Melaka into its national mail centre in Shah Alam, Selangor.

This initiative will be replicated across the country where feasible and will not impact Pos Malaysia’s capability to serve its postal obligations.