[SINGAPORE] Automotive group Tan Chong International posted a net profit of HK$11.7 million (S$1.9 million) for the first half ended Jun 30, reversing a net loss of HK$35.9 million from the same period a year ago.
In a bourse filing on Wednesday (Aug 27), the group said that revenue decreased 1.2 per cent to HK$6.5 billion from HK$6.6 billion over the same period a year earlier.
Earnings per share were HK$0.058 compared to a loss per share of HK$0.0178 in the year-ago period. An interim dividend of HK$0.02 per ordinary share was declared, payable on Sep 24.
While revenue remained stable, the group was able to report a net profit on the reduction of its costs and expenses as a result of “strengthened execution, with enhanced cost controls and operational efficiencies implemented group-wide.”
The group’s H1 distribution costs decreased to HK$463.3 million from HK$544.4 million, administrative expenses fell to HK$494.6 million from HK$507.4 million, and other operating expenses declined to HK$13.6 million from HK$83.4 million.
Excluding its subsidiaries the Zero group and Ethoz group, administration expenses were reduced by 11 per cent and distribution costs fell 29 per cent.
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In Singapore, Tan Chong said that sales of Nissan fell by 20 per cent year on year (yoy), due to the effect of more stringent emission schemes with reduced incentives for its passenger cars and discontinued incentives for its commercial vehicles.
It expects improved performance with the introduction of a new Townstar EV electric van and an improved version of the Serena multi-purpose vehicle in H2.
Subaru’s H1 sales improved 181 per cent yoy, outpacing the total market expansion of 29 per cent.
Weakening consumer sentiment as a result of uncertainty created by US trade tariffs affected vehicle sales in Taiwan and Malaysia. In Taiwan, Subaru sales declined 36 per cent as a result, compounded by the effects of an ageing model line-up. Malaysia saw a 37 per cent decrease in sales, which the group attributed to the entry of multiple new brands to that market.
Its Vietnam, sales were down 40 per cent, as the government continues to prioritise the electric vehicle market.
It retains optimism with the introduction of a new version of the Subaru Forester, historically one of its best-selling models, in H2 to many of those markets.
The group’s car rental subsidiary Ethoz posted a 2.4 per cent drop in revenue to HK$445.4 million, but net profit increased 10 per cent on increased interest income.
Its transport subsidiary Zero notched an 8 per cent increase in revenue to HK$4.2 billion, with net profit up 36 per cent.
Tan Chong said it maintains a “measured outlook, recognising that global economic conditions remain fluid”, but added that the cost controls and operation improvements would continue to provide a solid foundation for further progress.
Shares of the automotive group closed 5.2 per cent or HK$0.08 lower at HK$1.47, before the update.
