Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Nov 28): Tan Chong Motor Holdings Bhd posted a third consecutive quarterly net loss of RM4.5 million in the third quarter ended Sept 30, 2016 (3QFY16), compared with a net profit of RM29.18 million a year ago, mainly impacted by foreign exchange rates and the weaker ringgit.

Revenue for the quarter grew 2.19% to RM1.4 billion from RM1.37 billion.

Tan Chong explained that its lower earnings for the automotive business was a result of higher imported complete knock-down (CKD) costs.

For the nine months (9MFY16), Tan Chong’s recorded a net loss of RM56.3 million compared with RM69.69 million net profit in 9MFY15.

Revenue rose 0.71% to RM4.24 billion from RM4.21 billion.

On its prospects, Tan Chong said the Malaysian automotive sector is expected to remain challenging due to cautious consumers’ sentiments on capital purchases and continuing weak indicators in the domestic and global economic outlook.

“Volatility in the foreign exchange market and weakening of the Malaysian ringgit will continue to put pressure on profit margins due to its impact on the costs of imported CKD kits and components. The trading environment continues to be competitive with new model launches and aggressive sales and marketing campaigns by other automotive companies,” it said.

In the immediate term, the group said it will continue to improve and enhance the sales and marketing activities to sustain the sales in a competitive environment.

“As for the Indo-China market, the group continues to strengthen the sales network and increase the existing plant utilisation with the commencement of production and sales of Nissan X-Trail, a sports utility vehicle in Vietnam. The group continues to remain fully committed on returning to profitability,” it added.

Shares of Tan Chong closed unchanged at RM1.85 today, with 7,000 shares traded, for a market capitalisation of RM1.21 billion.

      Print
      Text Size
      Share