Pos Malaysia investment loss in Transmile
Filed Under (Business News) by Webmaster on 01-06-2010
Tagged Under : Pos Malaysia, Transmile
Pos Malaysia’s net profit eroded by 93% to RM1.6mil for the first quarter ended March 31 mainly due to impairment losses stemming from its investment in the financially-troubled Transmile Group Bhd.
Its mark-to-market losses from its investment in Transmile amounted to RM19.4mil in the quarter.
To recap, Transmile’s troubles started following an accounting scandal in mid-2007 that resulted in a massive drop in the company’s share price to a low of 39.5 sen on March 31, the mark-to-market cut-off date for this quarter.
Pos Malaysia holds a 15% stake in Transmile and had made a total provision of RM257mil for the last two financial years mainly to reflect the dimunition in value of its stake in Transmile.
However, at the operating level, Pos Malaysia recorded a profit of RM3.8mil for the quarter in review. This was 14% lower than the previous corresponding period due to higher operating expenses.
“Operating expenses were higher due to the increase in the cost of maintenance and supply, transportation and promotions. But, this was slightly cushioned by 0.1% increase in revenue to RM231.1mil,” the company said in a note to Bursa Malaysia.
Going forward the company said with the continuing economic recovery and impending postal tariff increase, it was optimistic on the group performance for the remaining period of the current financial year.
Earlier, Pos Malaysia was reported that it expected its revenue to rise by 15% to 18% in each of two 12-month periods after its postal tariff hike takes effect on July 1.
Apart from that, it has embarked on a three-year transformation master plan to help the company increase its revenue and profit and optimise its cost apart from strengthening its image.
Pos Malaysia had also said it did not rule out the possibility to take over the troubled Transmile. This was said by Pos Malaysia chairman Tan Sri Aseh Che Mat at the company’s AGM early last month.
The company is currently monitoring the developments in Transmile, including the progress of its debt restructuring.
The bulk of Pos Malaysia’s logistics business for east Malaysia is handled by Transmile.
For the financial year ended Dec 31, 2009 (FY09), Transmile’s net loss widened to RM270mil from RM121mil in FY08 with current debt amounting to RM500mil. Transmile is also seeking to work out a debt-restructuring exercise with its creditors, some of whom are seeking to wind up the beleagured airline company.
