KUALA LUMPUR (Aug 14): Tan Chong Motor Holdings Bhd reported a net profit of RM12.36 million for the second quarter ended June 30 2018 (2QFY18) year-on-year versus a net loss of RM23 million, although the group sold fewer cars during the quarter under review.

Earnings per share came in at 1.89 sen per share in 2QFY18 versus loss per share of 3.52 sen in the previous corresponding quarter. Revenue, however, dropped 9% to RM1.09 billion from RM1.2 billion a year ago.

As such the group declared an interim dividend of two sen per share for the financial year ending Dec 31, 2018, to be payable on Sept 28.

In a filing with Bursa this evening, the group said despite the lower revenue due to lower number of vehicles sold during the period, a higher earnings before interest, tax, depreciation and amortization (EBITDA) was recorded for the automotive division of RM101.8 million.

“The higher EBITDA was contributed by favourable sales mix and better profit margins due to the stronger ringgit compared to USD,” it said.

For the six months ended June 30, 2018, the group reported a net profit of RM16.62 million versus a net loss of RM58.32 million last year, while revenue reported was lower by 3% at RM2.12 billion from RM2.19 billion a year ago.

Moving forward, Tan Chong said it expects the domestic automotive sector to remain challenging in a highly competitive market and uncertainties due to changes in tax legislations vis-a-vis the reintroduction of sales and service tax (SST).

“The group had launched new locally assembled models such as all-new Nissan Serena S-Hybrid and Nissan Urvan NV350 to improve its competitiveness in the domestic market,” it said.

For overseas operations, it said the group would continue to follow through on its business strategy of expansion of sales and after-sales network into Cambodia, Laos, Myanmar and Vietnam.

“As part of the long-term strategy to strengthen the group’s position in the regional automotive sector, we will also expand into the commercial vehicles sector with the commercial vehicle plant in Vietnam,” it said.

Tan Chong Motor’s shares closed down one sen or 0.59% to RM1.69, for a market capitalisation of RM1.1 billion.