Tasco Berhad recorded core PATAMI of RM24.7m in 3QFY23, bringing the 9MFY23 net profits to RM70.3m. This came in ahead of expectations, making up 84% and 88% of our consensus estimates respectively. The positive deviation was attributed to stronger-than-expected growth of the domestic business segment.
On a quarterly basis, its core PATAMI fell to RM24.7m in 3QFY23 largely due to normalising freight rates which have led to lower topline contribution from its air freight forwarding and ocean freight forwarding businesses. Ocean freight rates as indicated by Freightos Baltic Index were about 3x lower in the said quarter relative to 3QFY22. This was partly cushioned by the outperformance of its contract logistics division on the back of increased business volumes from its growing customer base. Note that there was an adjustment of RM15.9m made in 3QFY22 for write-offs in relation to the flood and new warehouse construction. The core PATAMI was up by +9.8%qoq.
For the 9-month period, core PATAMI rose to RM70.3m as all divisions reported higher contributions with an increased handling volume. This is despite the general downtrend in freight rates which currently are only about 1.6x higher than pre-pandemic levels after peaking in Sep-21 or 2QFY22. Notably, the CL division’s revenue was up by +43.4%yoy due to strong volume for its customs clearance and warehousing segments.’
MIDF is revising the earning target upward for FY23E/FY24F/FY25F by +7.5-8.0% to account for higher contribution from the CL division. The Group has proven its earnings resiliency despite the normalising market freight rates due to the compensating upswing from its shipment volume. Furthermore, Tasco has a sizeable exposure in the electronics & electrical
(E&E) and semiconductor markets, which have been driving local exports.
