PETALING JAYA: CJ Century Logistics Holdings Bhd
’s third-quarter 2024 (3Q24) profit is expected to range between RM2mil and RM2.5mil, according to TA Research.
The brokerage said this would bring the cumulative nine-month core profit to between RM4.2mil and RM4.5mil, or 64% to 71% of its full-year forecast.
The company is set to release its 3Q24 results later this month.
“We expect both core divisions, namely the total logistics services and procurement logistics services, to rake in higher profits than the preceding quarter, which was affected by shipping disruptions and port congestion,” the research house added.
Recall that CJ Century Logistics suffered 62% and 68% declines in profit before tax and core profit, respectively, for the first half 2024, resulting from lower contributions from its oil logistics and freight forwarding segments.
“We attribute the decline in freight forwarding to the Red Sea crisis.
“However, the decline was offset by higher earnings before interest and tax contribution from the procurement logistics services, which surged 8.4% year-on-year,” TA Research noted.
It also noted that there was a significant correction in global container freight rates, which dropped from US$5,937 on July 18 to US$3,440 on Nov 14.
“The normalisation in the freight rates implies that global shipping liners have adapted to taking longer routes to bypass the Red Sea.
“Interestingly, however, we observe an uptick in rates, which coincided with Donald Trump’s landslide victory in the US presidential election,” the research house said.
“This could be an early sign that the container freight rates would reverse course due to looming tariff risks in 2025,” the brokerage added.
TA Research maintained its earnings projections for CJ Century Logistics for financial year 2024 (FY24) to FY26.
