Is Pos Malaysia Getting Covid 19 Aid



IT IS expected that Pos Malaysia will register a sluggish 1H20 on the protracted Covid-19 pandemic, which has disrupted e-commerce cross-border shipments and regional air travel.

That, coupled with the government’s MCO, is seen as directly impacting its postal services, courier and aviation operations. Conversely, the impact should be softened by the near-term plunge in fuel costs.

The issue is business survival. With the government stimulus package amounting to RM260 billion for sectors affected by the pandemic, I wonder whether our courier operators sustain their operation and overhead for maybe the next few months, with the Movement Control Order is seen to stay longer, perhaps after Hari Raya Aidilfitri.

So, how much is Pos Malaysia affected? Since it is refraining from major servicing, notably international, it is poised to incur losses in all portfolios. Like many other courier companies around the world, Pos Malaysia is reeling from the adverse impact of the pandemic.

Even before the MCO, Pos Malaysia had for the nine months ended Dec 31, 2019 registered widened net loss of RM215.6 mil from RM24.6 mil a year ago on the back of lower revenue of RM1.7 bil versus RM1.8 bil.

Now with the present situation and the uncertainty as to when the MCO and global network can end and recover, is banging the brain of the management and its staff too.

While some world postal companies are getting aid from the government, I believe Pos Malaysia is not (for now) getting it as the government is giving much emphasis on the SME and important sectors (isn't postal services important too?)

The country’s postal and courier services segment is also affected by the severe impact of the Covid-19 outbreak on the businesses as the global economy grinds to a halt to prevent the spread of the coronavirus.Players in the courier services segment have seen a drop of between 40% and 60% in terms of revenue as demand falls.For instance, GD Express Carrier Bhd (GDex) is seeing its business being affected as it provides solutions in the business-to-business (B2B) segment and has over 60,000 corporate clients providing end-to-end solutions.To mitigate the impact, the company has put in place stringent cost management, and improved its processes. The current situation also allows the company a chance to relook its current processes and improve on them.Likewise, RHB Research believed the onset of Covid-19 is expected to have an impact across its core businesses but continued to expect Pos Malaysia Bhd to register turnaround in its earnings in the financial year ending Dec 31, 2020, given the recent plunge in fuel prices, which are seen as mitigating a fall-off in non-postal revenue over the near term. The company has recently changed its financial year end to Dec 31 from March 31 previously.The research house maintained a buy recommendation for the counter, lowering its target price to 75 sen from RM1.70 previously.Like most industries suffering from the Covid-19 outbreak, experts said the courier services players are in need of the government’s help, and the association has put forth its proposal to the Malaysian Communications and Multimedia Commission (MCMC), which regulates the communications and multimedia industry including postal and courier services.The pandemic is affecting supply chains worldwide. The previous shutdown of many Chinese manufacturing facilities will lead to a significant supply shortage for the upcoming immediate few months.Although China has resumed its international services, most countries are still reluctant to manage letters and parcels from the country - where the pandemic begun - despite assurance by Beijing that all precautions have been taken.This is where our government should look into. The pandemic has not only affected the SME, banking institutions, imports and exports and the people but also 'unsung heroes' in the courier and services sectors.We still need them during this difficult times as some businesses and transactions need to go on...


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