During 1H18, Tan Chong
KUALA LUMPUR: Tan Chong Motor Holdings Bhd
swung into the black in the financial year ended Dec 31, 2018 but it expects the domestic automotive industry to be subdued in 2019.
The car manufacturer and assembler posted net profit of RM102.54mil in FY18 compared with net losses of RM88.60mil in FY17. Revenue increased by 11.9% to RM4.86bil from RM4.32bil.
“The domestic automotive industry outlook is expected to be subdued in 2019 as new vehicles sales remained soft due to cautious consumers’ sentiments on big ticket items and the continuing strict financing approval guidelines amidst the current economic condition,” it said in notes to its accounts on Monday.
Tan Chong said due to the outlook, it continued to remain cautious. “We anticipate the business landscape to remain challenging under these circumstances,” it said.
“Nevertheless, the group is committed to take on these challenges based on the foundation that we have built in Malaysia and the overseas market such as Cambodia, Laos, Vietnam and Myanmar. The group continues to remain focused on ensuring sustainable financial position going forward by leveraging on our core competencies,” it said.
Elaborating on the results for FY18, it said the automotive division's revenue rose by 11.6% on-year to RM4.75bil while earnings before interest, tax, depreciation and amortisation (Ebitda) jumped by 217% to RM305.1mil .
Revenue rose due to higher number of vehicles sold in the domestic and overseas market. Tax holiday sales also contributed to the higher sales in the domestic market for FY2018. The increase in Ebitda was due to favourable sales mix, improvement in foreign exchange rate and cost optimisation strategies resulting in improved margins.
The financial services division, comprising higher purchase and insurance, reported a 21% increase in revenue of RM91.9mil and Ebitda of RM23.3mil (up 11.3%) due to higher loan book size as of Dec 31, 2018 compared to previous year.
Tan Chong group's Q4 FY18 saw it posting net profit of RM51.55mil compared with net loss of RM7.19mil a year ago. Its revenue increased by 8.3% to RM1.16bil from RM1.07bil a year ago.
Earnings per share were 7.9 sen compared with loss per share of 1.10 sen. It announced a dividend of two sen a share compared with one sen a year ago.
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