SHAH ALAM: The declining profit margin of Pos Malaysia Bhd’s courier arm PosLaju is a thing of the past, its group chief executive officer Datuk Mohd Shukrie Mohd Salleh said, as the national postal service provider had streamlined the segment’s operations.

“What happened over the years was that PosLaju was not [treated as] a [separate] business, but we treated it as a strategic business unit. I think over the past couple of years, it had been unfairly allocated with certain costs because the way we allocated them was discretionary in nature,” he told a news conference after the group’s annual and extraordinary general meetings (EGM)  yesterday.

“We have redone the cost allocation to actually reflect the fact that if PosLaju were to be a courier company similar to other courier companies with their own profit and loss, what the profitability is going to look like. And I’m happy to see that it is enjoying much better margins from now on,” Mohd Shukrie added.

Pos Malaysia’s courier segment’s profit fell 38.8% to RM55.48 million in the financial year ended March 31, 2016 (FY16) from the previous financial year, despite revenue growing 15.8% year-on-year to RM556.1 million.

The group is expecting the courier segment to overtake the mail division in revenue contribution from FY18 onwards.

Mohd Shukrie said PosLaju had been undertaking a cost-optimisation programme to eliminate the inefficiency that the unit was facing.

As mail volume falls, he said, the group’s postmen wil now be carrying more PosLaju parcels to increase their productivity. “You will see more postmen now riding motorbikes with the big boxes at the back.

“Over time, as the volume of traditional mails goes down, they (postmen) can carry more and more PosLaju items. What this means [is that] there will be an increase in productivity. Revenue will go up, but the cost will be contained,” he added.

Going forward, Mohd Shukrie said Pos Malaysia will also hedge against exchange-rate fluctuations, which were a contributing factor to the group’s 50.3% drop in net profit to RM63.09 million in FY16.

As the ringgit fell substantially last year, Pos Malaysia renegotiated its international contracts to change the denomination to US dollars from the local currency, and with slightly higher value to absorb any future fluctuations.

Meanwhile, Pos Malaysia continues to look to monetise its land bank assets.

Mohd Shukrie said plans are still at the earliest stages of development, but the group had begun to identify assets that have potential to be monetised. “These include our properties and land as some of them are sitting idle.”

According to Pos Malaysia’s annual report for FY16, the group owned parcels of land totalling 13,801 sq m in Kinta, Perak. The land parcels were revalued right before the financial year ended and had a net book value of RM13.86 million.

Earlier at the EGM, Pos Malaysia shareholders gave their nod to its purchase of KL Airport Services Sdn Bhd and Konsortium Logistik Bhd — plus a piece of industrial land — from parent DRB-Hicom Bhd.