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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.

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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.



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