Thursday 28 Mar 2024
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KUALA LUMPUR (May 28): Tiong Nam Logistics Holdings Bhd’s net profit for the fourth quarter ended March 31, 2018 (4QFY18) sank 81.7% to RM6.89 million or 1.59 sen a share from RM37.6 million or 4.2 sen a share in the previous corresponding quarter, mainly due to substantial gain on fair value quoted investments in 4QFY17.

In a filing with Bursa Malaysia, Tiong Nam Logistics said the decrease in profit was mainly due to fair value loss on quoted investment amounting to RM 2.6 million compared with gain of RM16.6 million in FY17.

Furthermore, there was loss on disposal of quoted shares amounting to RM0.3 million in the financial quarter under review compared to a gain of RM9.3 million a year ago, on top of higher depreciation and amortization, and finance cost in 4QFY18.

Excluding results from the quoted investment segment, Tiong Nam’s 4Q18 core net profit dipped 4.1% to RM13.3 million, compared with 4Q17 core net profit of RM13.9 million.

Its quarterly revenue, however, rose 5.6% to RM170.8 million from RM161.74 million, mainly due to increase in contribution from logistics and warehousing services and property segment.

Tiong Nam managing director Ong Yoong Nyock said rising cross-border trade and manufacturing activities across the Southeast Asian region are expected to drive demand for integrated land logistics and warehousing services, posing strong potential for the company to capture.

"To this end, we have consistently expanded our warehousing capacity to support our clients’ expanding needs and take on larger volumes. Additionally, our new distribution centres and cross border routes in Vietnam, Myanmar and China have seen encouraging uptick in activity since they were set up in 2016-2017, and we hope to register greater contribution from these routes going forward,” he said.

For the financial year ended March 31, 2018 (FY18), the group's net profit plunged 62.57% to RM30.45 million from RM81.35 million in the previous year, while revenue grew 14.74% to RM657.94 million from RM573.42 million in FY17.

Going forward, Tiong Nam said the global and regional economic climate for FY19 is expected to remain challenging to its core business segment, logistics and warehousing services segment.

"The group will continue seeking new business opportunities, focus 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 FY19," it said, adding that it is still expecting to deliver another year of favourable profit.

Tiong Nam shares dropped one sen to RM1.03 today, giving it a market capitalisation of RM469.43 million.

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