KUALA LUMPUR (Nov 28): Harbour-Link Group Bhd’s net profit more than halved to RM16.13 million for the first quarter ended Sept 30, 2023 (1QFY2024), from RM39.16 million a year before, on lower revenue led by its shipping business due to stiff competition.

Other income also fell 27% to RM3.68 million, from RM5.07 million a year before, on the lower forex gains incurred.

Quarterly revenue fell 21.96% to RM206.1 million, from RM264.1 million a year before.

Its earnings per share dropped to 4.05 sen, from 9.82 sen per share a year in 1QFY2023, its filing with Bursa Malaysia showed.

Notably, this is the weakest quarterly earnings in nearly three years for the Bintulu-based shipping and integrated logistics player, after it last posted a net profit of RM13.99 million in 3QFY2021, on revenue of RM152.78 million.

On a segmental basis, Harbour-Link’s shipping and marine segment posted a revenue of RM128.2 million in 1QFY2024, down by 29% from RM180.58 million previously.

The segment's profit before tax (PBT) fell 71% to RM12.37 million from RM42.59 million a year ago, attributed to stiff competition with major liner operators who have deployed additional tonnage into the region that leads to the downward pressure on rates.

Its integrated logistics segment also saw a decline in revenue, dropping 5% for 1QFY2024 to RM53 million, from RM55.69 million previously. The segment’s PBT decreased 21% to RM9.7 million, from RM12.32 million, as most of the project cargoes have been completed.

Its heavy equipment trading segment’s revenue also dropped 16% to RM12.58 million for 1QFY2024, from RM14.91 million before. But, the segment's profit before tax rose to RM1.72 million, from RM649,000 due to higher margin in servicing and spare parts sales.

Its engineering segment’s revenue fell 42% for 1QFY2024 to RM7.33 million from RM12.73 million previously, due to projects being at the tail end, thus incurring a loss before tax of RM47,000, versus a profit before tax of RM47,000 previously.

Meanwhile, its property segment turned profitable during 1QFY2024, recording profit before tax of RM3.44 million, on revenue of RM5 million — this, however, is due to the sale of vacant land for RM3.72 million.

Moving forward, the group expects the upcoming festive seasons to bring in more cargo volume for the shipping division, and increase its utilisation rates that may keep freight rates stable.

“On the other hand, domestic freight rates may encounter headwinds due to additional players coming into the market with additional tonnages that shall create competition on freight rates. We shall expect some impact on our revenue,” it warned.

It also expects lower revenue for its integrated logistic division, amid local customers tightening their purchasing budgets towards the end of the year.

Similarly, it expects lower revenue and profits in the coming quarters for the engineering and construction division, given the works under existing contracts are mostly coming to the tail end and newly secured contracts are just starting.

Harbour-Link closed up one sen or 0.85% to RM1.19, giving the group a market capitalisation of RM476 million.