Swift Haulage: Prospects For a Stronger 2HFY24

Analysts maintained a neutral outlook for Swift Haulage Berhad (SWIFT MK) despite posting encouraging first-quarter results for the fiscal year 2024. The company’s core profit after tax and minority interest (PATAMI) of RM7.7 million aligns with analyst expectations, signaling the potential for stronger performance in the second half of the fiscal year.

Revenue growth was evident across all segments, driven by capacity expansion in the container depot division and increased activity in land transportation, particularly in smaller trucking and car carrier segments.

However, earnings saw a decline compared to the previous year, attributed to suboptimal warehouse utilization leading to compressed margins.

Swift Haulage – Future performance

The newly operational Westport Warehouse, fully occupied by Sharp Electronics Malaysia, is expected to boost margins as utilization rates increase. Additionally, anticipation of a new FMCG customer occupying remaining space by May-24 indicates positive growth prospects.

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While no adjustments were made to earnings estimates, the target price was revised upward to RM0.54 from RM0.50, reflecting optimism for future performance. Despite trading close to historical sector averages, analysts maintain a neutral stance on the stock, with potential upside catalysts including higher container throughput and improved margins.

Swift Haulage Berhad’s steady revenue growth and strategic warehouse expansions position the company for potential growth, albeit with cautious optimism regarding margin improvement and overall market performance.