KUALA LUMPUR, Feb 25 — Tan Chong Motor Holdings Bhd returned to the black with a net profit of RM101.03 million for the financial year ended Dec 31, 2018 (FY18) from a net loss of RM88.6 million in the preceding year.
In a filing with Bursa Malaysia today, the company said revenue improved to RM4.86 billion from RM4.34 billion previously, mainly supported by its automotive division which contributed RM4.75 billion to its total revenue.
“The automotive division recorded a higher revenue of RM4.75 billion in FY18, up 11.6 per cent from FY17 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 FY18,” it said.
Tan Chong said the segment’s earnings before interest, taxes, depreciation and amortisation also surged 217.3 per cent year-on-year to RM305.1 million in FY18, attributable to favourable sales mix, improvement in foreign exchange rate and cost optimisation strategies resulting in improved margins.
For the fourth quarter of 2018, Tan Chong said the company recorded a net profit of RM51.56 million from a net loss of RM7.19 million a year earlier, while revenue perked to RM1.17 billion from RM1.08 billion previously.
“The group’s financial position continued to improve with the net gearing of 30.7 per cent from 47.1 per cent in FY17, and the group’s retained earnings were at RM1.85 billion as of Dec 31, 2018,” it said.
On prospects, the company continued to maintain its cautious position as the domestic automotive industry outlook was expected to remain subdued in 2019.
“New vehicles sales (are expected to) remain soft due to cautious consumers’ sentiments on big ticket items, along with the continuing strict financing approval guidelines amidst the current economic condition.
“We anticipate the business landscape to remain challenging under these circumstances,” it added.
In a separate filing with the exchange, Tan Chong said Kawasaki Heavy Industries Ltd had decided not to renew, after March 31, 2019, the agreement giving Tan Chong’s indirect subsidiary TC Motorcycles (Vietnam) Co Ltd the exclusive distributorship to sell completely built-up Kawasaki sports-type motorcycles (excluding mopeds and scooters) as well as spare parts and accessories in Vietnam.
“The non-renewal of the distributorship agreement has no significant financial and operational impact on the group for the current financial year,” the company said. — Bernama