Positive sentiments could stem from its plan to form a 51%:49% joint venture company with JWD Asia Holding Pte Ltd to operate a cold chain (temperature control) warehouse and transport business in Peninsular Malaysia. JAH currently owns a 20.48% direct stake in Swift Haulage.

Swift Haulage aims to fast-track its entry into the cold-chain logistics sector, leveraging JAH’s expertise in logistics to provide reliable and cost-efficient temperature-controlled solutions.

JAH’s parent company SCGJWD Logistics Public Co Ltd is experienced in managing a large number of cold chain pallets and is knowledgeable in operating automated storage and retrieval systems (ASRS).

Swift Haulage said the also presented an opportunity to optimise the potential of its assets in Shah Alam and Tebrau. Feasibility studies are underway for a cold chain facility in Tebrau, which, if realised, will cater to Singapore’s high-demand market.

The company is also exploring expansion opportunities in the northern region, including Penang and other locations where Swift has a presence in Malaysia.

Among the risks highlighted by Swift Haulage pertaining to the JV are delays in infrastructure development for cold storage facilities and systems, which could impact operations and customer satisfaction.

It also added that the JV is exposed to demand uncertainty, as market demand for cold chain logistics may fluctuate or fail to meet projections, potentially affecting profitability.

The tie-up served as a positive development for Swift Haulage after reporting weaker-than-expected results in the third quarter ended Sept 30, 2024. The disappointing results dragged its share price performance, falling as much as 5.3% or 2.5 sen to 45 sen, its lowest since September 2023.

Net profit for the January-September period only accounted for about half of the consensus full-year estimate, prompting cuts to earnings forecasts and target prices (TPs) for the stock. Analysts also flag caution amid headwinds ahead for Swift Haulage.

The company faces pressure from steep competition, while take-up rates for its warehouse and container depot may be slower than expected, even as the segment may grow from capacity expansion.

Nevertheless, Swift Haulage is expected to see further margin improvement with warehouse utilisation rate of 80% this year, versus 74% in 2023. This could drive further growth through cross-selling opportunities.

Net profit in 3QFY2024 plunged almost 80% year-on-year to RM5.77 million. Higher finance costs also weighed on 3QFY2024, and the company did not declare any dividend.

However, revenue grew 8.9% year-on-year to RM183.06 million, mainly driven by the container haulage and land transportation segments that together contributed about 74% of total revenue.

For now, its share price has been depressed but things should brighter the company, which could swiftly show better earnings.