KUALA LUMPUR, June 16 — The Covid-19 pandemic has been a mixed blessing for postal delivery service operator Pos Malaysia Berhad, which more than halved its net loss in the first quarter of 2020 compared to the same period last year.
Group chief executive officer Syed Md Najib Syed Md Noor said its Q1 2020 net loss was just RM49.2 million compared to RM141.1 million in 2019.
“Revenue was 6.1 per cent lower at RM558.5 million. The group’s courier business saw an increase in parcel volume by 6.7 per cent year-on-year, contributed by 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,” he said in a statement.
Pos Malaysia's mail business also saw a 1-per-cent year-on-year increase in revenue, courtesy of the new postage rates revision that was implemented on February 1, 2020.
“Mail business’ monthly revenue increased by RM11 million in February this year, but saw a decline in mail volume in March, due to the pandemic.
“Postal segment revenue was contributed by mail and retail products at RM190.3 million,
followed by courier at RM178.8 million. The postage rates revision that took effect on February 1 contributed positively to the postal segment revenue,” Syed Md Najib said.
Meanwhile Covid-19 has also impacted business and resulted in a decline for this year's first quarter revenue. Despite e-commerce seeing a surge in demand for courier services at the end of March, fewer retail transactions were recorded in post offices.
“This is as customers remained cautious in treading outside their homes, while 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. Logistics segment revenue of RM75.5 million is mainly from freight management business (freight forwarding and haulage) and automotive business (local automotive production volume),” he said.
Pos Malaysia's other segments, consisting of Datapos, Pos Digicert and Pos ArRahnu were not impacted by the pandemic and are performing above targets.
In terms of its outlook, Syed Md Najib said 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 second quarter of the year.
“The group expects incremental annual revenue of RM100 to RM150 million for the mail business compared to the previous year. The reopening of businesses, primarily bulk mail operators and higher footfall into Pos Malaysia outlets, are expected to provide some improvements to the group’s mail and retail business.
“Average daily parcel volume recorded in April was approximately 590,000, a 69 per cent increase compared to March and a 66 per cent increase compared to February. The group expects this trend to continue as more consumers adapt online shopping as the new norm,” he said.
Pos Malaysia also foresees transhipment volume to resume at a gradual pace, once more countries lift Covid-19 related restrictions. April saw signs of recovery with transhipment revenue increasing by 84 per cent compared to March, due to the resumption of business in China.
“The 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 by the government.
“The group’s near-term objectives are to further improve service efficiencies and consequently, enhance customer experience by embracing automation and digitalisation, as outlined in the Group’s 3-year strategy in modernising its value chain, business practices and infrastructure," said Syed Md Najib.
The chief executive officer added that 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, and we believe that automation of our parcel sorting centres and our digitalisation efforts in deploying the new track and trace system would provide us the competitive advantage and enhance customer experience,” he said.
