RESEARCH
Swift Haulage Berhad: 2QFY25 Results Review – Margins Came Under Strain
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Downgrade to NEUTRAL. Swift Haulage Berhad’s (Swift) 2QFY25 core PATAMI missed expectations, with forecasts maintained pending the results briefing. For 2HFY25, container haulage margins may see some support from an expected industry-wide capacity gap following new axle load rules, though volumes could remain soft, while the warehousing segment is projected to gain from added capacity and improved utilisation. Our target price is unchanged at RM0.43 (11x FY26F EPS or -0.5SD from the 5-year historical sector’s mean). We downgrade the stock to NEUTRAL as the positives of the stock have been priced in following a +10% share price increase since our last report.
Below expectations. Swift’s core PATAMI stood at RM12.8m in 1HFY25, falling short of expectations at 41% of both our and consensus full-year forecasts as margins came under pressure. The Group declared a first interim single-tier dividend of 0.8 sen for the reported period, representing a 55% dividend payout ratio.
Container haulage was the lone laggard. Revenue rose a solid +9.2%yoy with gains across most segments. Container haulage was the exception, recording a -1.6%yoy drop in revenue and a -17.4%yoy fall in EBIT, likely due to softer gateway cargo volumes compounded by heightened competition. Land transportation delivered a strong +14.4%yoy revenue increase, but EBIT declined -24.6%yoy as trips shifted toward shorter hauls. Meanwhile, the freight forwarding segment recorded a strong +50.9%yoy increase in revenue, boosted by project cargo activity. Altogether, core PATAMI was largely unchanged, slipping marginally by -0.1%yoy, weighed by higher operating, finance, and tax expenses.
Shorter-haul trips drove margin weakness. Sequentially, revenue inched up by +1.7%qoq, with container haulage remaining the weakest performer, posting a -3.8%qoq drop in revenue and a -6.0%qoq decline in EBIT. Land transportation delivered the strongest revenue growth at +12.5%qoq, though the -36.8%qoq decline in EBIT appears to be driven by the higher mix of lower-margin shorter-haul trips noted earlier. Overall, core PATAMI dropped -25.2%qoq, with margin narrowing by -1.0 ppt.
Earnings estimates. Our projections remain unchanged pending the upcoming results briefing.
SWIFT HAULAGE: 2QFY25 RESULTS SUMMARY
Income Statement
| FYE Dec (RM’m) | Quarterly | QoQ | YoY | Cumulatively | YoY | |||
|---|---|---|---|---|---|---|---|---|
| 2QFY25 | 1QFY25 | 2QFY24 | 1HFY25 | 1HFY24 | ||||
| Revenue | 188.7 | 185.7 | 172.9 | 1.7% | 9.2% | 374.4 | 352.2 | 6.3% |
| Operating profit | 19.8 | 19.7 | 20.2 | 0.4% | -2.0% | 39.5 | 53.0 | -25.4% |
| Finance costs | -9.4 | -9.3 | -9.0 | -0.8% | -4.7% | -18.8 | -17.6 | -6.8% |
| Associates and JV | -0.01 | 0.1 | -0.1 | -107.5% | 92.6% | 0.1 | -0.1 | 195.6% |
| PBT | 10.4 | 10.5 | 11.1 | -1.0% | -6.6% | 20.8 | 35.3 | -41.0% |
| Tax expense | -2.7 | -2.7 | -2.1 | 0.4% | -25.6% | -5.4 | -5.0 | -8.6% |
| PAT | 7.7 | 7.8 | 9.0 | -1.2% | -14.3% | 15.4 | 30.4 | -49.1% |
| PATAMI | 6.7 | 7.2 | 8.3 | -6.5% | -19.0% | 14.0 | 29.5 | -52.6% |
| Core PATAMI | 5.5 | 7.3 | 5.5 | -25.2% | -0.1% | 12.8 | 13.0 | -1.2% |
| ppts | ppts | ppts | ||||||
| OP margin (%) | 10.5% | 10.6% | 11.7% | -0.1 | -1.2 | 10.5% | 15.0% | -4.5 |
| PBT margin (%) | 5.5% | 5.6% | 6.4% | -0.1 | -0.9 | 5.6% | 10.0% | -4.5 |
| Core PATAMI margin (%) | 2.9% | 4.0% | 3.2% | -1.0 | -0.3 | 3.4% | 3.7% | -0.3 |
| Effective tax rate (%) | -26.0% | -25.8% | -19.3% | -0.2 | -6.7 | -25.9% | -14.1% | -11.8 |
SEGMENTAL BREAKDOWN
| Revenue | Quarterly | QoQ | YoY | Cumulatively | YoY | |||
|---|---|---|---|---|---|---|---|---|
| 2QFY25 | 1QFY25 | 2QFY24 | 1HFY25 | 1HFY24 | ||||
| Container haulage | 66.5 | 69.1 | 67.6 | -3.8% | -1.6% | 135.6 | 137.2 | -1.2% |
| Land transportation | 71.6 | 63.6 | 62.6 | 12.5% | 14.4% | 135.3 | 129.7 | 4.3% |
| Warehousing & depot | 31.8 | 31.3 | 28.0 | 1.7% | 13.7% | 63.1 | 55.2 | 14.3% |
| Freight forwarding | 22.1 | 21.6 | 14.7 | 2.5% | 50.9% | 43.7 | 30.0 | 45.9% |
| EBIT | 2QFY25 | 1QFY25 | 2QFY24 | QoQ | YoY | 1HFY25 | 1HFY24 | YoY |
| Container haulage | 4.5 | 4.8 | 5.5 | -6.0% | -17.4% | 9.3 | 12.0 | -21.9% |
| Land transportation | 2.3 | 3.7 | 3.1 | -36.8% | -24.6% | 6.1 | 9.0 | -32.8% |
| Warehousing & depot | 5.2 | 5.3 | 5.2 | -1.9% | 1.1% | 10.6 | 10.2 | 3.9% |
| Freight forwarding | 10.1 | 9.8 | 6.1 | 2.3% | 65.6% | 19.9 | 12.5 | 59.2% |
| EBIT Margin | 2QFY25 | 1QFY25 | 2QFY24 | QoQ | YoY | 1HFY25 | 1HFY24 | YoY |
| Container haulage | 6.8% | 7.0% | 8.1% | -0.2 | -1.3 | 6.9% | 8.7% | -1.8 ppts |
| Land transportation | 3.3% | 5.8% | 5.0% | -2.6 | -1.7 | 4.5% | 7.0% | -2.5 ppts |
| Warehousing & depot | 16.4% | 17.0% | 18.5% | -0.6 | -2.0 | 16.7% | 18.4% | -1.7 ppts |
| Freight forwarding | 45.5% | 45.6% | 41.5% | -0.1 | 4.0 | 45.5% | 41.7% | 3.8 ppts |
Source: Swift Haulage, MBSBR
FINANCIAL SUMMARY
| Profit or Loss (RM’m) | 2023A | 2024A | 2025E | 2026F | 2027F |
|---|---|---|---|---|---|
| Revenue | 671.5 | 720.5 | 750.5 | 780.2 | 804.3 |
| Operating profit | 100.0 | 88.2 | 78.8 | 81.9 | 84.5 |
| PBT | 65.9 | 51.6 | 41.5 | 44.7 | 47.2 |
| Taxation | -2.8 | -9.3 | -10.0 | -10.7 | -11.3 |
| PATAMI | 61.7 | 40.3 | 31.6 | 33.9 | 35.9 |
| Core PATAMI | 33.3 | 26.6 | 31.6 | 33.9 | 35.9 |
| Core EPS (sen) | 3.8 | 3.0 | 3.6 | 3.9 | 4.1 |
| PER | 11.3x | 14.2x | 12.0x | 11.1x | 10.5x |
| DPS (sen) | 1.6 | 1.6 | 1.2 | 1.3 | 1.4 |
| Dividend yield | 3.7% | 3.7% | 2.9% | 3.1% | 3.3% |
| Balance Sheet (RM’m) | 2023A | 2024A | 2025E | 2026F | 2027F |
|---|---|---|---|---|---|
| PPE | 658.5 | 752.1 | 757.7 | 762.9 | 767.8 |
| ROU assets | 356.0 | 336.3 | 327.6 | 319.4 | 311.6 |
| Non-current assets | 1,312.7 | 1,386.4 | 1,385.8 | 1,369.4 | 1,355.6 |
| Trade debtors | 220.1 | 260.0 | 270.9 | 281.6 | 290.3 |
| Cash | 159.2 | 47.5 | 68.1 | 99.9 | 131.5 |
| Current assets | 407.7 | 328.7 | 352.3 | 394.8 | 435.1 |
| Non-current liabilities | 594.4 | 653.1 | 653.1 | 653.1 | 653.1 |
| Short-term debt | 263.0 | 213.1 | 213.1 | 213.1 | 213.1 |
| Trade creditors | 138.5 | 99.7 | 102.2 | 106.2 | 109.5 |
| Current liabilities | 419.5 | 327.0 | 329.4 | 333.5 | 336.8 |
| Share capital | 384.9 | 386.6 | 386.6 | 386.6 | 386.6 |
| Equity | 706.5 | 735.0 | 755.5 | 777.6 | 800.9 |
Key Metrics
| Key Metrics | 2023A | 2024A | 2025E | 2026F | 2027F |
|---|---|---|---|---|---|
| Containers (TEUs) | 588.7k | 554.7k | 571.3k | 588.4k | 606.1k |
| Transportation trips | 216.7k | 243.9k | 253.7k | 263.8k | 274.4k |
| Freight forwarding jobs | 87.4k | 100.8k | 103.8k | 106.9k | 110.1k |
| Warehousing (sq ft) | 1.31m | 1.54m | 1.86m | 1.86m | 1.86m |
Source: Swift Haulage, MBSBR
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