Tiong Nam reports profitable 1Q, driven by increasing demand for its logistics and warehousing services

TheEdge Mon, Aug 23, 2021 08:10pm - 2 years View Original


KUALA LUMPUR (Aug 23): Tiong Nam Logistics Holdings Bhd reported a net profit of RM1.55 million for the first quarter ended June 30, 2021 (1QFY22), versus a net loss of RM5.53 million a year earlier, driven by stronger demand for the group's logistics and warehousing services from existing and new customers.

Quarterly revenue jumped 35.7% to RM166.91 million from RM122.99 million in the previous year, its bourse filing showed, as top line for the group's logistics and warehousing services segment grew 35.9% to RM163.8 million from RM120.5 million in 1QFY21. Its property development segment's revenue also quadrupled to RM1.2 million from RM0.3 million a year earlier, though its hotel and dormitory segment's revenue fell 15% to RM1.7 million from RM2 million.

Compared with the immediate preceding quarter (4QFY21), however, Tiong Nam's net profit fell 78% from RM7.04 million, as revenue dipped from RM169.19 million — dragged by a sharp drop in contribution from its property development business, and a decline in revenue from its logistics and warehousing services segment.

Prospects-wise, Tiong Nam said the group's core logistics and warehousing services segment is expected to be affected by the global and regional economic slowdown due to the Covid-19 pandemic. "However, the group will continue to strategise to maintain our market shares, focus on operational efficiency, cost control, service innovation to sustain its core logistics and warehousing business over the long term," it said.

The group also noted that its property and hotel and dormitory segments are expected to incur operating loss in FY22.

In a separate statement, Tiong Nam managing director Ong Yoong Nyock said the group's stake dilution in its loss-making hospitality segment will see the subsidiary Terminal Perintis Sdn Bhd become an associate company, which would enhance the group's earnings outlook and financial resources. It would also position Tiong Nam as a pure-play total logistics solutions provider on Bursa Malaysia, he said.

As such, and in line with the improving vaccination rate in the country and the implementation of the National Recovery Plan, Ong said the group is confident of delivering a stronger performance in FY22.

Tiong Nam's share price closed two sen or 2.29% higher at 89.5 sen, valuing the group at RM469.72 million.

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