BEST - BEST continues to see COVID pressures in Q4 performance

2023-03-09 13:35:45 ET

BEST ( NYSE: BEST ) is trading around +6% on Thursday despite posting lower Q4 revenues due to the pressures of COVID restrictions in China.

Revenues fell around 27.3% Y/Y to $287.3M for Q4, weighed down by a nearly one-third drop in total freight turnover and 41% lower global revenue, primarily due to decreased parcel volume and a decrease in average selling price per tonne.

Yet the logistics services provider managed to tighten its hold on margin declines with the help of cost control measures and operational improvements. Cost of revenue for freight dipped 10.4% Y/Y, and cost of revenue for supply chain management fell 6.3%.

As a result, BEST was able to bring down its gross margin to -3% from -8.4% in the year-ago quarter.

For the full year, sales were down by around 32.2% to $1.1B, with freight revenue down 40.7% and global revenue decreasing 23.2% Y/Y.

CEO Johnny Chou also suggested better days ahead: "After lifting of COVID pandemic-related controls, we have seen a rapid recovery in general economy and our multiple business lines.  We are confident to deliver a strong growth and financial results in 2023."

CFO Gloria Fan added: "In 2023, we expect Freight and Supply Chain Management to become profitable in the second quarter and generate positive cash flow and profitable growth throughout the year, and BEST Global to see profitability in certain countries."

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