Higher tax rates drag Tiong Nam’s 3Q net profit

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KUALA LUMPUR (Feb 26): Tiong Nam Logistics Holdings Bhd’s net profit dropped 43% to RM9.83 million for the third quarter ended Dec 31, 2017 (3QFY18) from RM17.26 million a year ago driven by the higher effective tax rate.

The effective tax rate increased by 25.2% to RM5.37 million in the financial quarter under review against RM4.29 million in the previous corresponding period, said Tiong Nam’s announcement to Bursa Malaysia, adding that it was above the statutory tax rate due to certain expenses which were non-deductible.

Quarterly revenue, however, expanded 24% to RM172.78 million from RM139.28 million due to increase in logistics and warehousing as well as property development revenue.

Tiong Nam said logistics and warehousing services revenue had increased by 13.4% to RM 131.63 million compared to RM116.08 million a year earlier due to securing of new total logistics customers as well as business expansion from existing customers.

Meanwhile, the property development revenue jumped by 78% to RM41.12 million compared with RM23.13 million due to construction progress for the flagship projects in Nusajaya (SiLC7 and Pinetree Marina Resorts project).

For the cumulative nine months period ended Dec 31, 2017, Tiong Nam’s net profit dipped 46.15% to RM23.56 million from RM43.75 million, while revenue grew 18.33% to RM487.13 million versus RM411.69 million.

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

It added the property development segment is expected to contribute positively to the group in financial year 2018.

“The group will strengthen our core competencies and step up efforts to incorporate strategies of customers’ development and service innovation as a differentiating factor in the competitive operating environment,” it said.

Tiong Nam share price has taken a dive from RM1.75 in August last year to a low of RM1.12 last week. It closed one sen or 0.87% at RM1.16, giving it a market capitalisation of RM529.8 million.