FM: Logistics Firm Delivers Strong Performance on Cost Controls, Analysts See Upside

A prominent logistics firm has reported robust financial results, with its core profit for the second quarter of fiscal year 2026 meeting analyst expectations. The strong performance was primarily driven by enhanced operating margins and effective cost management.

Performance Review

For the second quarter of FY26, the company recorded a net profit of MYR9.1 million, marking a 3.1% increase year-on-year and a 4.3% rise quarter-on-quarter. Adjusted EBITDA saw a 2.1% year-on-year growth to MYR25.2 million, alongside an 8.4% quarter-on-quarter increase. Adjusted EBIT also rose by 3.4% year-on-year and 13.2% quarter-on-quarter, reaching MYR16.3 million. The gross profit margin improved notably to 28.2% in 2QFY26 from 26.5% in 2QFY25, reflecting a better product mix and operational efficiencies. Operating EBITDA margin also expanded to 10.9% from 10.2% in the prior year’s comparable quarter. The report highlighted that recurring earnings per share are projected to grow by 9.1% in FY26, followed by 10.0% in FY27, and 11.9% in FY28.

Operational Highlights and Challenges

The improved operating margins, coupled with a lower effective tax rate, contributed significantly to the positive financial outcome. Strong contributions from the sea freight, third-party logistics (3PL), warehousing, and distribution segments, along with the positive impact of a newly operational warehouse in Port Klang, were key drivers. While revenue experienced a year-on-year softening due to prevailing softer freight rates, the company’s ability to optimize its cost structure and leverage a favourable product mix mitigated the impact. The firm noted that it does not anticipate a significant impact from US tariff uncertainties, given its primary focus on the Southeast Asian market, where Malaysia accounts for 80-90% of its segment.

Future Outlook

Looking ahead, the logistics firm is poised for sustained growth, with analysts expecting strong volume expansion in the sea freight division throughout FY26. Further profitability improvements are anticipated, bolstered by robust performance in the 3PL, warehousing, and distribution segments, and the continued contribution of the Port Klang warehouse. The company also anticipates benefiting from broad-based economic growth and increased cross-border trade activities, which are expected to drive demand for logistics services.

Analyst View

Investment bank TA SECURITIES has maintained a “BUY” recommendation for the company, setting a target price of RM0.25. This target price represents a significant upside of 25.0% from its last traded price of RM0.20, reflecting confidence in the company’s operational strengths and future growth prospects.