KUALA LUMPUR: The ongoing lockdown resulted in a weaker-than-expected performance for Pos Malaysia Bhd in the first half of the year amid a weaker performance in its postal segment.

       Kenanga Research widened the group's FY21 net loss estimate to RM226.5mil after its 1HFY21 net loss expanded to RM120.1mil.

       However, it maintained its earnings projection for FY22 at RM62.2mil.

       "For the immediate term, we expect the lockdown to continue weighing on postal and logistics segments, but anticipate it to fully end by December while we maintain the FY22E net profit on post-pandemic recovery," it added while reiterating "market perform" on Pos with an unchanged target price of 80 sen.

       In 1HFY21, the weaker performance was attributed to a decrease in mail and parcel volume handled especially from contract customers affected by the lockdown that started in June this year.

       This was partially offset by stronger revenue in the logistics segments especially freight forwarding and the automotive business as well as recovery in the aviation division's revenue.

       "POS’ 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," said Kenanga.