KUALA LUMPUR (Jan 29): Tasco Bhd’s net profit dropped 32.37% to RM13.82 million for the third quarter ended Dec 31, 2023 (3QFY2024) from RM20.44 million a year earlier, on the back of freight rate normalisation as well as weaker performance from its domestic business solutions (DBS) segment.

Earnings per share dropped to 1.73 sen from 2.55 sen, according to the logistics solutions provider’s bourse filing on Monday.

The normalising freight rates, as well as weaker domestic business divisions’ performance, was reflected in the group’s topline, as revenue fell 29.35% to RM277.45 million from RM392.69 million in 3QFY2023.

Tasco's international business solutions (IBS) segment posted a 40.62% decline in revenue to RM109.8 million from RM184.9 million, dragged by the normalised freight rates.

Meanwhile, revenue of its DBS segment was down 19.35% to RM167.6 million from RM207.8 million, weighed down by weaker contributions from the group's contract logistics division, warehouse, in-plant and haulage businesses.

For the nine-month period ended Dec 31, 2023, Tasco posted a 36.4% decline in net profit to RM43.89 million versus RM69 million a year prior, as revenue fell 39.99% to RM804.27 million from RM1.34 billion.

The cumulative earnings were weaker due to the same reasons that impacted its quarterly counterpart.

Looking forward, Tasco said ocean freight rates have been on the rise due to the geopolitical conflict in the Red Sea, but is nevertheless offset by slowing global trade volume.

“Taken as a whole, we remain cautious about the prospects of the group for the remaining period to the end of the financial year.

“Downside risks for our group include the weaker-than-expected economic activity, economic recession in the current fragile global economic conditions, inflationary pressure in our cost structure and geopolitical trade war affecting our customers,” the group said.

“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.

Shares in Tasco closed unchanged at 87 sen, giving the group a market capitalisation of RM696 million.