KUALA LUMPUR (Oct 29): Integrated logistics solutions provider Tasco Bhd (KL:TASCO) saw its net profit fall 48.7% to RM8.13 million for its second financial quarter ended Sept 30, 2024 (2QFY2025) from RM15.85 million a year earlier, on the back of lower contribution from its supply chain solutions (SCS) division within the international business solution (IBS) segment.

Within the domestic business solutions (DBS) segment, earnings contributions from the contract logistics, cold supply chain and trucking divisions were also down in the quarter under review.

This resulted in a lower earnings per share of 1.02 sen for 2QFY2025 compared with 1.98 sen for 2QFY2024.

Quarterly revenue, however, rose 8.1% to RM295.69 million from RM273.63 million on 2QFY2024, driven by its IBS segment.

For the cumulative six months ended Sept 30, 2024 (1HFY2025), the group's net profit dropped 49.7% to RM15.14 million from RM30.07 million a year earlier, on lower profits from the SCS division within the IBS segment.

The group's net profit was further offset by the net non-operating expenses from its support segment, which included an exceptional one-time expense of RM3.6 million, consisting primarily of the write-off of the carrying amount of a block of head office building located at its Shah Alam Logistics Centre.

"The office building was demolished to build an expansion (Phase 2) of its recently completed new four-storey modern warehouse," said Tasco in a filing with Bursa Malaysia on Tuesday.

It added that reduced interest income, an increase in unrealised foreign exchange loss arising from a strengthened ringgit and finance costs contributed to additional expenses in the support segment in 1HFY2025.

Revenue grew 3.6% to RM545.62 million from RM526.83 million a year earlier.

Going into the remaining period of its financial year, Tasco anticipates a challenging operating environment.

"With the recent unveiling of Budget 2025, we are expecting inflationary pressure again to hit our cost structure. The other area of concern to us is the escalating geopolitical trade war which may affect global trading activities, in particular the export of Malaysian manufactured goods. In such an economic scenario, we remain cautious on the prospect of the group for FY2025.

"Downside risks for our group include the weaker-than-expected economic activity or recovery; inflationary pressure in our costs due to government implementation of policy; and the aforesaid geopolitical tension and trade war which may affect our customers," it added.

Tasco shares closed down one sen or 1.37% at 72 sen on Tuesday, giving it a market capitalisation of RM572.16 million. The stock has fallen 6.49% so far this year.