Keppel T&T's logistics arm suffers 5% revenue loss

Asset boost in China didn’t help buoy its revenue.

Keppel Telecommunications & Transportation's logistics division is facing a stormy outlook as volumes and margins remain under pressure.

According to UOB Kay Hian analysts Edison Chen and Foo Zhi Wei, the logistics division suffered a 5% revenue loss in the past quarter, down to $34.7m.

The two said this came as the additional revenue from assets ramping up in China was offset by weakness in a South-east Asian operation.

However, the acquisition of Courex is a silver lining for the said division.

"Courex represents a bright spot and part of KPTT’s transformational strategy for the logistics business in Singapore. It intends to tap on Courex’s last-mile fulfilment to capture additional parts of the logistics value chain and grow its urban logistics business," the analysts said.

Additionally, the recent launch of its omnichannel management solution targeting fast moving consumer goods (FMCG) companies will help.

"Already, a large FMCG firm has signed up and KPTT is targeting more. Nonetheless, we admit overconfidence in prospects for the logistics division and anticipate breakeven only in 2019," the two said.