KUALA LUMPUR (Nov 27): Tiong Nam Logistics Holdings Bhd is eyeing growth opportunities in the regional logistics and warehousing services sector as it seeks to maintain its lead position

"With trade and e-commerce activity across Southeast Asia expected to demonstrate strong growth, we look forward to greater demand for logistics and warehousing solutions," said managing director Ong Yoong Nyock.

Ong said opportunities are abound for integrated providers that can bring greater efficiency and value to businesses amid competitive environments.

"Recognising this, we are investing in the expansion of our infrastructure in Malaysia and across the region, involving the setup of new delivery routes, as well as new warehousing facilities and sales offices," he said in a statement today.

Tiong Nam's net profit fell marginally by 0.07% to RM13.04 million in the second quarter ended Sept 30, 2017 (2QFY18) from RM13.05 million a year earlier.

Quarterly revenue rose 22.7% to RM173.44 million from RM141.32 million previously, thanks to higher deliveries and value of services in the logistics and warehousing services segment.

The segment's revenue rose 19.4% to RM126.2 million from RM105.7 million due to the securing of new total logistics customers as well as business expansion from existing customers.

"We saw the need to expand aggressively to maintain our lead position, and are optimistic that our logistics segment would return to profitability in the second half of FY18 as we increasingly scale up our operations," Ong said.

Meanwhile, the group's property development revenue rose 32.4% to RM47 million in 2QFY18 compared to RM35.5 million a year ago, attributed to the construction progress for Pinetree Marine Resorts Project in Johor Bahru.

Additionally, Tiong Nam also attributed the better performance to the expansion initiatives in strengthening regional infrastructure and broadening its range of services.

Since FY16, the integrated logistics services provider has expanded its number of warehouses in Malaysia and overseas to 87 from 77, of which 80 in Malaysia, four in Singapore, two in Thailand and one in Myanmar.

The group has also established new delivery routes to cover Vietnam, Myanmar, Laos, and China.

Cumulative six-month (6MFY18) net profit dropped 48.19% to RM13.73 million from RM26.49 million a year earlier, while revenue grew 15.4% to RM314.35 million from RM272.41 million.

In May, the group had also established its last last-mile e-commerce delivery service — Instant — to equip itself to become a major integrated player in the burgeoning sector.

Ong said Instant continues to see growing delivery volume and is in discussions with prominent e-commerce platforms in Malaysia to become a delivery partner.

Going forward, the group will continue seeking new business opportunities, focusing on operational efficiency and cost control effectiveness to better contend with competition.

"The property development segment is expected to contribute positively to the group in the financial year 2018," it said, adding that it is still expecting to deliver another year of favourable profit.

Tiong Nam's share price closed one sen or 0.75% lower at RM1.32, giving a market capitalisation of RM602.76 million.