KUALA LUMPUR (July 30): Logistics solutions provider Tasco Bhd’s (KL:TASCO) net profit halved to RM7 million in the first quarter ended June 30, 2024 (1QFY2025), from RM14.22 million a year ago, dragged mainly by a one-time expense of RM3.6 million, resulting from the writing off the carrying value of a head office building at the Shah Alam Logistics Centre.

The head office was demolished to allow for the construction of a new 4-storey modern warehouse aimed at increasing the company's future logistics capacity, according to its filing on Bursa Malaysia.

The new warehouse will create another 400,000 sq ft of lettable space, which will be joined to the existing four-storey warehouse of 600,000 sq ft.

Construction for the new warehouse has already commenced and is anticipated to be fully completed in 2026.

Notably, the latest quarterly earnings were its weakest since 3QFY2022, when it posted RM8.81 million.

Earnings per share dropped to 0.88 sen per share in 1QFY2025, versus 1.78 sen in 1QFY2024.

Quarterly revenue inched down 1.29% to RM249.93 million, from RM253.19 million a year before.

No dividend was declared during the quarter under review.

Looking forward, Tasco anticipates a challenging operating environment.

While the International Monetary Fund (IMF) and Bank Negara Malaysia (BNM) foresee balanced growth and an increase in exports, esteemed bodies caution about risks from persistent inflation and prolonged high interest rates, which could hinder economic growth, it said.

Additionally, the threat of escalating geopolitical trade wars could negatively impact export activities in the Asean region, including Malaysia, it added.

Tasco said downside risks to the group include weaker-than-expected economic activity, cost inflation due to diesel subsidy rationalisation and geopolitical tensions.

“We will continue to maintain our strategy to focus on servicing our customers with innovative logistics solutions and expand our logistics capacity when it is beneficial to our shareholders' value,” it said.

Tasco shares closed up two sen or 2.3% to 90 sen on Tuesday, valuing the group at RM720 million. Year-to-date, the stock has risen 18%.