Tiong Nam Off To Good Start For FY2022

Posts net profit to shareholders of RM1.5 million in 1Q FY2022; turning around from loss of RM5.5 million previously

Automated Storage and Retrieval System) warehouse

Tiong Nam Logistics Holdings Berhad (Tiong Nam) made positive strides with a net profit of RM1.5 million for the first quarter ended 30 June 2021 (1Q FY2022), turning around from net loss of RM5.5 million previously. 

The improved performance was driven by increasing demand for the Group’s logistics and warehousing services from existing and new customers, with group revenue surging 35.7% to RM166.9 million in 1Q FY2022.

Ong Yoong Nyock, Managing Director of Tiong Nam Logistics Holdings Bhd says: “We are seeing significant logistics demand across the wide range of industries we serve, alongside the improving vaccination rates in the country and gradual reopening of various sectors. For example, the Food & Beverage, Information Technology, Electrical & Electronics sectors have seen exceptional growth in activity due to the work-from-home and e-commence trends.

“Additionally, as an integrated logistics solutions provider to various multinational (MNC) clients for their Southeast Asia markets, MNC contribution to Group revenue exceeded 30% in FY2021, compared to about 10% just 5 years ago. This is testament to our track record as one of the leading logistics players in Southeast Asia.

We look forward to continuing this positive trend of growth, which will also be supported by our ongoing warehouse expansions in Malaysia, as well as enhancements to our regional routes in Southeast Asia and China.”

The Group is in the midst of expanding its warehousing network, which would see its total warehousing capacity rise by 21% to 7.5 million square feet (sq. ft.) by FY2024 from 6.2 million sq. ft. currently. Among the notable expansions include a new dedicated warehouse to be built at Senai Airport City totalling up to 1.1 million sq. ft. in built-up area for lease to a renowned MNC, which is expected to complete in FY2024. 

The logistics and warehousing services segment remained the largest revenue contributor to the Group at RM163.8 million or 98.2% of 1Q FY2022 revenue, improving 35.9% year-on-year. The balance 1.8% was contributed by the Group’s property development, hotel and dormitory, and investments segments. 

Commenting on prospects, Ong says that the Group was confident of delivering a stronger performance in the current financial year, in line with the improving vaccination rate in the country and the implementation of the national recovery plan. 

“The dilution of our stake in the loss-making hospitality segment will see our subsidiary Terminal Perintis Sdn Bhd become an associate company.”

“This would not only enhance our earnings outlook and financial resources, but also position Tiong Nam as a pure-play total logistics solutions provider listed on Bursa Malaysia,” he says.

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