Tiong Nam returns to the black in first quarter

KUALA LUMPUR: Logistics solutions provider Tiong Nam Logistics Holdings Bhd recorded a net profit of RM1.55mil in the first quarter ended June 30 (Q1’21) from a net loss of RM5.53mil a year ago, thanks to increasing demand for the logistics and warehousing services from existing and new customers.

In a statement yesterday, its managing director Ong Yoong Nyock said the group is seeing significant logistics demand across the wide range of industries it is serving in line with the improving vaccination rates in the country and gradual reopening of various sectors.

“For example, the food and beverage (F&B), information technology (IT), electrical and electronics (E&E) sectors have seen exceptional growth in activity due to the work-from-home and e-commence trends,” he added.

The group’s revenue jumped 35.7% to RM166.91mil in the quarter compared to RM122.99mil a year ago driven by mainly by the logistics and warehousing services and property development segments.

“Revenue for logistics and warehousing services has increased by 35.9% to RM163.8mil as compared to RM120.5mil for the preceding year corresponding quarter. This increase is due to securing new total logistics customers as well as business expansion from our existing customers.

“Property development revenue has increased by 300% to RM1.2mil compared to RM0.3mil for the preceding year’s corresponding quarter,” said the group.

However, revenue for hotel and dormitory fell 15% to RM1.7mil from RM2mil a year ago.

Given the higher revenue recorded in the Q1’21, Ong said the group is set to continue the positive trend of growth supported by its ongoing warehouse expansions in Malaysia, as well as enhancements to our regional routes in South-East Asia and China.

“The group is in the midst of expanding its warehousing network, which would see its total warehousing capacity rise by 21% to 7.5 million square feet by financial year ending March 31, 2024 (FY24) from 6.2 million square feet currently.

“Among the notable expansions include a new dedicated warehouse to be built at Senai Airport City totalling up to 1.1 million square feet in built-up area for lease to a renowned multi national company, which is expected to complete in FY24,” he added.

For the current financial year ending March 31, 2022 (FY22), Ong is confident that the group would record stronger performance in view of the vaccination rate improving in the country and the implementation of the National Recovery Plan.

“The dilution of our stake in the loss-making hospitality segment will see our subsidiary Terminal Perintis Sdn Bhd become an associate company.”

“This would not only enhance our earnings outlook and financial resources, but also position Tiong Nam as a pure-play total logistics solutions provider listed on Bursa Malaysia,” he noted.

However, Tiong Nam expects its core logistics and warehousing services segment to be affected by the slow down in the global and regional economic climate going forward.

In the long run, the group said it would continue to strategise to maintain its market shares, focus on operational efficiency, cost control, service innovation to sustain its core logistics and warehousing business.

It also added that its property development as well as hotel and dormitory segments are likely to incur operating loss in FY22.

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