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TASCO’s Profits Surge Despite Revenue Dip: A Deep Dive into Q1 2026 Results
Published: July 29, 2025
TASCO Berhad, a cornerstone of Malaysia’s logistics industry, has just released its financial results for the first quarter ended June 30, 2025. In a fascinating display of operational agility, the company reported a significant surge in profitability even as its top-line revenue saw a decline. This report reveals a company strategically navigating a challenging economic landscape.
The headline numbers are certainly attention-grabbing: while revenue dipped, TASCO’s profit before tax jumped by an impressive 37.6%. So, what’s behind this paradox? Let’s unpack the numbers and explore the story they tell about TASCO’s performance and future strategy.
Core Data Highlights: A Tale of Two Metrics
At first glance, the key financial indicators present a mixed but ultimately positive picture. The decline in revenue was more than compensated for by a robust improvement in profit margins, showcasing effective cost management and strategic business adjustments.
Q1 FY2026 (Current Quarter)
Revenue: RM 222.6 million
Profit Before Tax (PBT): RM 11.8 million
Profit After Tax (PAT): RM 9.8 million
Earnings Per Share (EPS): 1.15 sen
Q1 FY2025 (Same Quarter Last Year)
Revenue: RM 249.9 million
Profit Before Tax (PBT): RM 8.6 million
Profit After Tax (PAT): RM 7.8 million
Earnings Per Share (EPS): 0.88 sen
The 10.9% year-on-year drop in revenue was primarily driven by the Domestic Business Solutions (DBS) segment, which faced headwinds from the production suspension of a major solar panel customer. However, the star of the show was the International Business Solutions (IBS) segment, which saw its pre-tax profit skyrocket by 175%, lifting the entire Group’s bottom line.
A Deep Dive into Business Segments
The divergence in performance between TASCO’s international and domestic arms is the key to understanding this quarter’s results. One segment soared while the other navigated significant challenges.
| Segment | Revenue (Q1 FY2026) | Revenue Change (vs Q1 FY2025) | PBT (Q1 FY2026) | PBT Change (vs Q1 FY2025) |
|---|---|---|---|---|
| International Business Solutions (IBS) | RM 99.9 million | -0.9% | RM 7.7 million | +175.0% |
| Domestic Business Solutions (DBS) | RM 122.5 million | -17.8% | RM 6.8 million | -41.4% |
International Business Solutions (IBS): The Profit Engine
Despite a marginal dip in revenue, the IBS segment delivered a stunning performance. The Air Freight Forwarding division, though seeing lower revenue due to reduced volumes, dramatically improved its profitability by 118.8%. This was achieved by strategically terminating a loss-making shipping lane and focusing on higher-margin business from aerospace customers. Similarly, the Ocean Freight and Supply Chain Solutions divisions posted remarkable profit growth of 214.3% and 250.0% respectively, fueled by new customers in the E&E, automotive, and aerospace sectors.
Domestic Business Solutions (DBS): Facing Headwinds
The DBS segment’s performance was heavily impacted by external factors. The Contract Logistics division’s revenue fell by 20.0% following the suspension of a major solar panel client, which affected its custom clearance and warehousing businesses. The Cold Supply Chain division also saw profits decline due to the loss of an F&B customer and slower volumes from fast-food chains. The Trucking division’s profit was nearly wiped out, falling by over 100% due to the loss of the same solar panel customer.
Financial Health and Cash Flow Check
While profitability improved, a look at the cash flow statement reveals some important details. The company’s cash position decreased during the quarter, mainly due to changes in working capital.
For the quarter, TASCO reported a net cash outflow from operating activities of RM 68.2 million, a significant increase from the RM 15.1 million outflow in the same period last year. This was primarily due to an increase in trade receivables—meaning more money is tied up with customers who have yet to pay.
On the balance sheet, total assets grew to RM 1.9 billion, largely reflecting ongoing investments. However, with a corresponding rise in liabilities, the net assets per share saw a slight dip from RM 0.80 to RM 0.79.
Risk and Prospect Analysis: Building for the Future Amid Uncertainty
TASCO is operating in a cautious global environment. The World Bank has downgraded its global growth forecast for 2025, citing trade tensions and tariffs. Domestically, while fundamentals remain supportive, Bank Negara Malaysia has also revised its growth forecast downwards for the year.
Despite these headwinds, TASCO is not standing still. The management has emphasized its commitment to long-term growth through strategic investments. Two key projects are underway:
- The expansion of the Shah Alam Logistics Centre (SALC), adding 400,000 square feet of space.
- The rebuilding of a 300,000 square foot warehouse in Northport, Port Klang.
Both projects are on track for completion by mid-2026 and are crucial to strengthening TASCO’s capacity to capture future market opportunities, positioning the company for growth when the economic climate improves.
Summary and Outlook
TASCO Berhad’s first-quarter results for FY2026 demonstrate remarkable resilience. The company successfully boosted its profitability through sharp operational execution and strategic realignment, even as revenue faced pressure from specific client-related issues and a softer domestic market. The International Business Solutions segment was the clear growth driver, showcasing the company’s ability to pivot to higher-margin activities.
Looking ahead, while the global economic outlook remains uncertain, TASCO is making bold, long-term investments in its infrastructure. These strategic projects are designed to build a foundation for sustainable growth, ensuring the company is well-equipped to handle future demand. Investors will be keenly watching how the company manages its working capital and navigates the persistent macroeconomic risks.
Key risks to monitor for the upcoming periods include:
- Global Economic Slowdown: Continued trade tensions and weaker global demand could further impact trade flows and logistics volumes.
- Customer Concentration Risk: The significant impact from the loss of a single major customer highlights a key vulnerability in the domestic segment.
- Working Capital Management: The negative operating cash flow, driven by higher receivables, needs to be monitored to ensure it’s a temporary issue and not a sign of underlying collection problems.
- Operational Cost Pressures: Inflation, currency volatility, and potential regulatory changes could put pressure on margins if not managed effectively.
Final Thoughts
From my perspective, this report paints a picture of a company in proactive transition. TASCO is clearly not just reacting to the market but is actively shaping its business portfolio—shedding less profitable activities while strengthening its high-margin international services. The significant capital expenditure on new warehouses, while straining cash flow in the short term, is a powerful statement of management’s confidence in the long-term future of logistics in the region.
What are your thoughts on TASCO’s strategy? Do you believe the big bets on new warehouses will pay off in the current economic climate?
Share your views in the comments below!
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