KUALA LUMPUR: Tan Chong Motor Holdings Bhd
saw earnings fall sharply to RM1.87mil in the third quarter ended Sept 30, 2014 from RM31.66mil a year ago due to a decline in its operating profit.
It said on Wednesday revenue was lower by 9% to RM1.149bil compared with RM1.268bil a year ago. Earnings per share were 0.29 sen compared with 4.85 sen.
Operating profit for the quarter stood at RM21.57mil compared with RM55.32mil a year ago.
Despite the price war, Tan Chong began reducing its inventory to RM1.59bil as at Sept 30, 2014 from RM1.73bil as at Dec 31, 2013.
For the nine-month period, net profit was 46.9% lower at RM97.19mil compared with RM183.11mil in the previous corresponding period. Revenue declined to RM3.497bil from RM3.844bil.
Tan Chong said the automotive division recorded lower revenue due to the loss of market share in the Malaysia B-segment, which is where Tan Chong’s key model is.
The B-segment comprises small and compact cars. “Profit margin to sacrificed to sustain market share and to lower inventory level,” it said.
The company said that despite industry wide de-stocking in a period of weak end demand, the automotive division is expected to claw back market share in the fourth quarter on the back of aggressive marketing efforts in a seasonally slower year end for total industry volume.
“We believe that our longstanding partnerships with leading premium and mass market brands will sustain our position,” said Tan Chong.
Revenue from its operations in Indo-china is expected to improve since the customs duty issue in Vietnam has been resolved.
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