KUALA LUMPUR (Nov 24): Tan Chong Motor Holdings Bhd narrowed its net loss to RM7.33 million for its third quarter ended Sept 30, 2020 (3QFY20), from RM79.36 million in 2QFY20, as it saw a rebound in vehicle sales following the lifting of movement restrictions. The sales tax exemption for locally assembled vehicles that took effect on June 15 also boosted sales.

Revenue expanded by 88% quarter-on-quarter (q-o-q) to RM964.54 million from RM512.89 million, the Nissan car distributor's bourse filing today showed. It also announced an interim dividend of 1.5 sen per share, to be paid on Dec 28.

Besides a stronger automotive segment, which saw a 91% q-o-q jump in revenue to RM940.3 million, its financial services segment recorded a 19% improvement in revenue to RM18.5 million, the group noted.

Compared with the corresponding 3Q a year ago, however, the group fell into the red from a net profit position of RM9.25 million, when revenue was higher at RM1.05 billion.

Meanwhile, for the cumulative nine months ended Sept 30, 2020, the group posted a net loss of RM95.96 million, versus a net profit of RM44.66 million a year earlier, as revenue dropped 31% to RM2.21 billion from RM3.2 billion.

"The disruptions caused by the Covid-19 pandemic have led to a decline in automotive revenue and EBITDA (earnings before interest, taxes, depreciation and amortisation) compared to the preceding year," Tan Chong said.

Going ahead, the group expects the government's full sales tax exemption for locally assembled vehicles and 50% exemption for imported completely built-up (CBU) vehicles from June 15 to Dec 31 to continue to benefit the industry for the remainder of the year.

"However, the group expects challenging conditions ahead in view of the uncertainties surrounding the economic recovery in Malaysia as well as in the region.

"In response to the challenging conditions caused by the pandemic, the group will continue to focus on optimising its operations and expects to mitigate the adverse impact through cost containment initiatives in order to maintain a sustainable financial position," it said.

In the mean time, the group noted it launched its all-new Almera Turbo on Nov 1 across Malaysia, while two new models of its MG brand sport utility vehicle were introduced in Vietnam in August. "These highly anticipated new models are expected to drive sales growth for the group," it added.

Tan Chong shares closed two sen or 1.87% lower at RM1.05 today, valuing the group at RM685.07 million.