Home Investments POS MALAYSIA BHD (PSHL:KL) registers biggest-ever net loss

POS MALAYSIA BHD (PSHL:KL) registers biggest-ever net loss

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POS Malaysia at the Malaysia eCommerce expo 2016 at Matrade Kuala Lumpur

POS MALAYSIA BHD (PSHL:KL) registers biggest-ever net loss

Pos Malaysia Bhd recorded a net loss of RM165.7mil for the financial year ended March 31, 2019 – its biggest-ever loss for a full year.

The group had reported a net profit of RM93.25mil during the preceding year.

Pos Malaysia said the net loss was attributed mainly to widening losses from mail and impairment charges of RM39.6mil from the loss of goodwill in Pos Logistics.

“The losses from mail is a result of a continuing double-digit contraction in mail volume and bill payments, reflecting the increasing substitution of letters with electronic media.

Pos Malaysia’s group CEO, Syed Najib Syed Md Noor, said the loss was a result of the continuing decline in mail volume (13% year-on-year), coupled with high costs related to serving the Universal Service Obligation.

“We are working closely with the regulator for an overall tariff rebalancing to update the tariff that was last changed in 2010 accordingly to reflect the growing costs to serve the nation with an increase of 17% new postal addresses.

“We expect a positive outcome from the regulators on the tariff rebalancing,” he said.

He added that the goodwill impairment for Pos Logistics was due to increasing competition, which has resulted in poor performance.

“This impairment is a one-off expense,” he said.

During the period, the group also recorded a lower revenue of RM2.3bil, representing a decrease of 4.8%.

The lower revenue, the group said, was mainly due to reduced income from the logistics segment, which the group said was on the back of the completion of its project related to the Refinery and Petrochemical Integrated Development project in Pengerang.

The postal services segment also registered a lower revenue of RM697.6mil, as compared to RM734.3mil previously, due to “accelerating decline in traditional mail volume, largely due to electronic substitution”.

Another segment that saw a significant drop in revenue was the international segment, which saw revenue fall by RM13.2mil on the back of lower volume in transshipment, following the loss of a major customer account.

During the fourth quarter, Pos Malaysia recorded a net loss of RM141.1mil, while revenue also came in lower at RM594.7mil.

Moving forward, the group said its business outlook remained generally challenging.

“One major challenge is the continuing contraction in mail volume, as business enterprises are increasingly communicating with their customers via electronic and digital channels, foregoing mail-based communications,” it said.Syed Najib said, however, that Pos Malaysia would be making significant investments into digital transformation and expanding its capabilities to serve the growing demand for e-commerce.

“The outlook for e-commerce and Pos Malaysia over the next few years is very promising.

“We are looking at the double-digit growth to continue, as more and more people shop online in Malaysia,” he said.

Via ongoing investments, he said the foundation would be set for Pos Malaysia to expand its business with the best infrastructure and solutions to serve the market.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 1.86.

The projected upper bound is: 1.66.

The projected lower bound is: 1.49.

The projected closing price is: 1.57.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 6 black candles for a net of 4 black candles. During the past 50 bars, there have been 13 white candles and 26 black candles for a net of 13 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 11.5385. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 22.77. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 3 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -147.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

POS MALAYSIA closed down -0.010 at 1.580. Volume was 47% below average (neutral) and Bollinger Bands were 35% wider than normal.

Open High Low Close Volume___
1.590 1.610 1.570 1.580 522,800

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.71 1.84 2.57
Volatility: 39 31 60
Volume: 640,340 711,878 1,194,385

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

POS MALAYSIA is currently 38.4% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of PSHL.KL (mildly bearish). Our trend forecasting oscillators are currently bearish on PSHL.KL and have had this outlook for the last 11 periods. Our momentum oscillator is currently indicating that PSHL.KL is currently in an oversold condition.


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