KUALA LUMPUR (Aug 30): Tan Chong Motor Holdings Bhd (KL:TCHONG) extended its streak of losses to the seventh straight quarter as sales fell amid intense competition in the automotive industry at home and abroad.
Net losses also ballooned to RM40.11 million for the second quarter ended June 30, 2024 (2QFY2024) from RM18.13 million a year earlier, Tan Chong said in an exchange filing. Revenue for the quarter declined 12% year-on-year to RM545.1 million from RM619.2 million.
Tan Chong, which mainly assembles Nissan-branded vehicles in Malaysia, expects new launches over the next 24 months will help the company to regain some of the marque’s lost ground. The company also distributes Renault cars in the country.
“There are also additional contract assembly activities that will materialise over the course of next few quarters” to help boost its finances while the company continues to “rationalise its operations” to drive down cost, Tan Chong noted.
In Vietnam, the King Long buses and TQ Wuling light commercial pick-ups would continue their sales momentum and drive better plant utilisation, the company said.
Along with the newly launched GAC models, “we are cautiously optimistic that the performance in Vietnam will start to show some improvements in the months ahead”, Tan Chong added.
For the first half, Tan Chong’s net loss widened to RM55.83 million from RM23.20 million over the same period in 2023, while revenue declined 10.5% year-on-year to RM1.11 billion from RM1.24 billion.
Retained earnings totalled RM1.47 billion at the end of June and the Tan Chong also did not declare any dividends.
Earnings before interest, tax, depreciation and amortisation (Ebitda) at the mainstay automotive division declined 91% to RM5.8 million due to lower revenue, narrower margin from weaker ringgit, and lower foreign exchange gain.
Ebitda at the company’s financial services arm, which provides hire purchase and insurance, fell 37% to RM6.8 million along with the lower vehicle sales.
Shares of Tan Chong closed up 1.5 sen or 2.08% at 73.5 sen, giving the group a market capitalisation of RM490.54 million ahead of the results announcement.