KUALA LUMPUR (Aug 27): Tiong Nam Logistics Holdings Bhd’s first quarter net profit rose 7.1 times to RM4.86 million or 1.07 sen per share, from RM683,000 or 0.16 sen per share a year ago, on growth in its logistics and warehousing services segment and narrower losses in the investments segment.

Revenue for the quarter ended June 30, 2018 grew 10.1% to RM155.1 million from RM140.9 million previously, due to revenue growth seen in both the logistics and warehousing services segment as well as property development segment.

The logistics and warehousing services revenue increased 6.3% to RM129.7 million from RM122 million a year earlier, due to the securing of new total logistics customers as well as business expansion from its existing customers.

“Property development revenue increased by 7.2% to RM25.3 million compared with RM18.8 million for the preceding year's corresponding quarter. This increase is mainly due to our construction progress for one of our flagship projects in Johor Bahru (Pinetree Marine Resorts Project),” it added.

Group managing director Ong Yoong Nyock said the latest first quarter is the group’s third consecutive quarter of improvement in profits at the logistics and warehousing services segment, driven by higher value added services provided to customers and improved efficiency.

“Notably, we have also seen encouraging growth in revenue derived from MNCs (multinational companies), which contributed approximately 25% of the segment’s revenue in FY2018.

Going forward, we target to grow revenue contribution by MNCs to exceed 30% of segment revenue in FY2020,” Ong said.

He added that the group is optimistic of its prospects as MNCs increasingly partner with specialist partners like Tiong Nam to manage their complex supply chain requirements, thus enabling more resources to be channelled to core activities and improving cost-competitiveness.

The group however noted that the global and regional economic climate in FY19 is set to remain challenging to its core business, logistics and warehousing services segment, and that maintaining Tiong Nam’s market share is paramount to its long-term sustainability.

“Furthermore, through leveraging on our deep understanding of a wide range of industries in the region, we look forward to partnering more growth-oriented MNCs to bring greater value to their business, and strengthen our position as a leading logistics and warehousing services provider,” said Ong.

Tiong Nam’s share price closed unchanged at RM1 with 41,500 shares traded, giving the group a market capitalisation of RM456.2 million.