Tasco ends FY2023 on high note, 'cautiously positive' about next financial year

KUALA LUMPUR (April 27): Tasco Bhd closed its financial year ended March 31, 2023 (FY2023) on a high note, posting record net profit and revenue.

Net profit for FY2023 grew 39.2% to RM90.8 million from RM65.25 million in the previous year. As a result, earnings per share was higher at 11.35 sen for FY2023, compared to 8.16 sen for FY2022.

Revenue for FY2023 grew 8.5% to a record RM1.61 billion — breaking its earlier record of RM1.48 billion in FY2022, driven by revenue from the domestic business solutions segment which recorded a 23.7% year on year (y-o-y) growth. This was offset by a 3.4% y-o-y decline in revenue from the international business solutions segment due to the normalisation of freight rates.

In a bourse filing on Thursday (April 27), Tasco said the strong FY2023 performance was achieved despite the normalisation of international freight rates which had gained momentum in the second half of FY2023.

"During this period, we saw our domestic business solutions segment performing credibly to mitigate the reduction in our international business solutions segment, thus demonstrating again our resilience as a total logistics solution provider, which has allowed us to diversify and balance our risks between the more stable domestic logistics business against the more unpredictable international freight business.

It also declared a final interim dividend of 3.5 sen per share for FY2023, payable on May 26.

On a quarterly basis, Tasco posted a lower net profit of RM21.8 million in the fourth financial year ended March 31, 2023 (1QFY2023), down 12.8% from RM24.99 million a year earlier.

Revenue for 1QFY2023 fell 36.6% to RM266.64 million from RM420.76 million in 1QFY2022, as the normalisation of freight rates caused both its domestic business solutions and international business solutions segments to post lower revenue during the current quarter.

"Going forward into our next financial year, we reckon that the market freight rates for both air and ocean will remain fairly stable, as the freight rates have already dropped to pre-pandemic or near pre-pandemic levels," said Tasco.

It also believes that the domestic business solutions segment, in particular its contract logistics and cold-chain divisions, will continue to rebound in FY2024 in line with the group's strength as a total logistics solutions provider.

The group will also be able to realise substantial tax savings from its integrated logistics services tax incentive in FY2024 as two warehouses in Shah Alam and Westports — currently under construction — are scheduled for completion in FY2024. "This would impact its bottom line positively," said Tasco.

"We are cautiously positive about the prospects of the group for the next financial year. Nevertheless we are mindful of the downside risks for our group, which would be the risk of recession in the current fragile global economic conditions, inflationary pressure in our cost structure, geopolitical trade war affecting our customers and the continued tightening of fiscal policy by central banks globally. We will continue to maintain our strategy to focus on servicing our customers with innovative logistics solutions and expand our logistics capacity when it is beneficial to our shareholders' value," it added.

Tasco shares closed up one sen or 1.12% at 90 sen on Thursday, giving it a market capitalisation of RM716 million.