KUALA LUMPUR: Swift Haulage Bhd's third quarter (Q3) 2023 earnings is expected to remain subdued due to a challenging macro environment, affecting its logistics rates.
Maybank Investment Bank Bhd (Maybank IB) said positively, Swift has been proactively embarking on its sustainable journey amid the economic slowdown.
While the firm's acknowledge Swift's commitment to sustainability and expansion, there will be execution risks amid current challenges in the macro front.
"On the expanded service tax scope to include the logistics sector proposed in Budget 2024 on Oct 13, Swift is not expected to be impacted, as the service tax will be borne by its customers," it said.
In Q3 2023, Swift signed a RM4.4 billion industrial land lease agreement for up to 30 years (with an option to renew) with Terengganu State Economic Development Corp, as it aims to expand its presence in the East Coast region to better service its key oil and gas (O&G) petrochemical industry clients.
"We are positive about this move. Nonetheless, this requires additional capex which may further burden its already highly leveraged balance sheet. Returns however, are anticipated to take time to materialise. We have yet to impute this development into our earnings forecasts
Maybank IB kept its earnings forecasts and "Hold" rating on Swift with a 52 sen target price.
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