PETALING JAYA: 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.

“The impairment of goodwill in Pos Logistics is a result of a performance that was below expectations due to competitive market conditions,“ the group said in a statement.

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.