How did PSIG's net profit turn negative in Q3 2023?

PS International Group (PSIG) experienced a significant decline in net income, turning negative in Q3 2023, primarily due to a substantial decrease in revenue and an increase in expenses:

1. **Revenue Decline**: The company's revenue fell by 38% to $87.17 million compared to the previous year's $140.02 million. This reduction in revenue is a primary factor in the negative net income. Specifically:
- The cinema business faced challenges, with revenue decreasing by 6.5% and 4.8% in Australia and New Zealand, respectively, compared to the same period in the prior year.
- The real estate segment also contributed to the operational success, delivering $5.2 million in revenue and $1.3 million in income.
2. **Expense Increase**: Despite the revenue decline, the company's expenses increased, contributing to the negative net income. For instance:
- The company reported a net loss of $4.83 million for the full year 2024, which is a 205% decrease from the $4.58 million profit in FY 2023. This indicates that the expenses are increasing at a faster rate than the revenue.
- The adjusted EBITDA margin decreased to 70.0% from 71.4% in the same period last year.
3. **Overall Financial Performance**: The overall financial performance of the company has been under pressure, with a return on equity that is negative at -106.1%, indicating inefficiency in transforming shareholder equity into returns. The return on assets is also below the industry average at 40.6% compared to the US Integrated Freight & Logistics industry average of 7.15%.
4. **Comparative Analysis**: When comparing PSIG's performance with other companies in the same industry, it is evident that PSIG's revenue growth has been impressive, with a 43.9% increase year over year, outperforming the US Integrated Freight & Logistics industry average of 6.59%. However, this growth has not been sufficient to offset the recent declines and negative financial metrics.

In conclusion, PSIG's negative net profit in Q3 2023 is a result of a combination of factors including a significant decrease in revenue and an increase in expenses. The company's financial performance indicators suggest that it is facing challenges in managing its expenses and generating sufficient revenue to sustain profitability.