PETALING JAYA: Although Pos Malaysia Bhd has been having a challenging time being in the red for a while, its fortunes are set to reverse in the financial year 2022 (FY22).

       Despite the downside risks, analysts expect its performance to improve by next year as the company takes advantage of the robust e-commerce growth.

       The company’s net loss widened to RM43.9mil for the third quarter ended Sept 30, 2021 (Q3FY 21) from RM7.4mil in Q3’FY20.

       During the period in review, its revenue fell 13.9% to RM536.3mil from RM623mil in Q3’FY20, and its loss per share widened to 5.61 sen from 0.95 sen.

       Year-to-date, Pos Malaysia’s net loss widened to RM212.5mil from RM75.7mil in the nine months to September 2020 on lower contribution from the postal segment.

       For the nine months in review, its revenue fell to RM1.67bil from RM1.79bil in the corresponding period last year.

       Pos Malaysia van

       While contribution from the postal segment was lower, Pos Malaysia saw growth in the logistics and aviation segments.

       Kenanga Research said the company’s inability to close down post offices, coupled with its unionised workforce could well mean profitability at its postal services segment is capped.

       “The courier business is expected to improve on e-commerce demand but will continue to operate in a competitive environment pressured by price and cost challenges.

       “The group is continuing with its efforts to manage costs with forecasted RM24mil costs saving yearly.

       “Going into 2022, Pos Malaysia will continue executing its turn around initiatives, improving both its service and its efficiency to create the platform to capitalise on the ongoing e-commerce growth opportunities,” the research house added.

       Kenanga is maintaining its “market perform” stance with unchanged target price of RM0.720 based on 10 times FY22 estimated earnings per share. The saving grace is a 5% dividend yield, it noted.

       However, it said risks to its call include slower-than-expected turnaround in profit for postal services and lower-than-expected margins in its courier segment.

       Pos Malaysia’s Group chief executive officer Charles Brewer in announcing its Q3’FY21 results recently added that: “Despite the continuing Covid-19 challenges, we are beginning to see the signs that the turn around plan is starting to deliver.

       “We are redoubling our efforts to turnaround the business, address ‘foundational’ service gaps and to transform our business to position Pos Malaysia as the provider of choice for e-commerce parcels, whilst carefully managing expenses, cashflow and liquidity.”