Tan Chong Motor continues to struggle due to soft demand


Losing money: The assembler and exclusive distributor of Nissan and Renault motor vehicles in Malaysia reported loss attributable to shareholders of RM35.3mil in the quarter ended March 31 against a loss of RM37.2mil a year earlier.

KUALA LUMPUR: TAN CHONG MOTOR HOLDINGS BHD (TCMH), which fell into a loss last year after more than a decade of profitability, continued to struggle financially in the first quarter of 2017 due to softer demand for new vehicles.

The assembler and exclusive distributor of Nissan and Renault motor vehicles in Malaysia reported loss attributable to shareholders of RM35.3mil in the quarter ended March 31 against a loss of RM37.2mil a year earlier.

Revenue, meawhile, slid by 30% to RM995.7mil, it said in its quarterly financial report to Bursa Malaysia yesterday.

In terms of segmental performance, TCMH’s automotive division recorded a 30% lower revenue of RM976.6mil in the quarter under review, with earnings before interest, tax, depreciation and amortisation (Ebitda) falling 21% year-on-year to RM10.6mil.

The company attributed the slide in performance to the overall weak consumer demand.

In contrast, the financial services (hire purchase and insurance) operations enjoyed a 22% jump in revenue to RM16.8mil and a 102.7% improvement in Ebitda to RM6.5mil.

“The higher Ebitda in the current quarter compared to previous-year same quarter was due to lower impairment loss provided for hire purchase receivables in Q1 2017,” TCMH explained.

Looking forward, the company expects the domestic automotive sector will remain challenging as consumer appetite remains weak amid the strict financing approval guidelines in the current economic environment.

“The group will continue to remain disciplined and maintain our focus on key priorities to ensure sustainable financial position.

“Sales and marketing activities will be enhanced to maintain our competitiveness in Malaysia.” it said.

The TCMH group, which is the sole and exclusive distributor of Nissan vehicles for Cambodia, Laos, Myanmar and Vietnam, and of high-powered Kawasaki motorcycles in Vietnam, said overseas sales and distribution were expected to continue expanding.


   

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