Tiong Nam Logistics Holdings Berhad (Tiong Nam) recorded RM1.2 million net profit in the second quarter ended 30 September 2023 (2Q FY2024), down by 29%, compared to RM1.7 million in the previous corresponding quarter.
In a statement, the group said the decrease was mainly due to the impact of increased finance cost and direct operating expenses.
“(However), the group revenue continued to be resilient, rising 3.7% to RM183.5 million in 2Q FY2024 compared to RM177 million previously, supported by stable source of income from the logistics and warehousing services segment and increased property development revenue,” it said today (Nov 27).
The group said logistics and warehousing services segment remained the largest contributor to the group, making up 94.6% or RM173.5 million of total 2Q FY2024 revenue.
“Revenue from this segment was largely maintained compared to RM175.6 million in the previous quarter, on stable demand from the group’s diversified clientele.
“However, the segment faced increased finance costs, and increased overhead expenses due to new warehouses,” it said.
Meanwhile, the group’s property development segment, which made up 4.9% of group revenue in 2Q FY2024, improved to RM9 million compared to RM500,000 previously, due to construction progress of its residential development in Kota Masai, Johor.
For the first half ended 30 September 2023, group revenue rose 6 % to RM376.3 million from RM354.9 million in the previous period, while net profit was maintained at RM2 million, it added.
Tiong Nam managing director Ong Yoong Nyock said the stable performance of its logistics and warehousing services segment is attributed to our diverse clients spanning various industries, which helped overcome headwinds in some sectors.
“As market conditions improve amid continued progress in economic recovery, we anticipate a further increase in business demands from our clientele. Our on-going warehouse expansions are aimed generating long-term growth.
“Additionally, our newly completed 1.1 million sq ft mega warehouse facility in Senai Airport City (SAC), Johor has commenced lease to our client, Mercedes Benz Parts Logistics Asia Pacific in mid-November 2023, providing us with long-term lease income,” he said.
Ong said going forward, it will continue to enhance and expand its logistics and warehousing services segment, connecting supply chains across Malaysia with the regional markets.
“Our commitment is to provide high-quality logistics services and solutions to meet diverse customer needs,” he said.
Tiong Nam is undertaking a RM376.4 million capital expenditure (Capex) initiative spanning two years until the financial year ending 31 March 2025 (FY2025), to expand its logistics and warehouse network.
Over 90% of the total planned CAPEX is allocated for the construction of six warehouses located in Johor, Kedah, and Singapore.
The recently completed mega warehouse in SAC, Johor, now leased as Mercedes-Benz’s regional After-Sales Logistics Centre, has increased the group’s warehousing capacity to 8.1 million sq. ft.
In the meantime, construction is ongoing for three warehouses in Johor, Kedah and Singapore, while another two are in the pipeline for Johor and Kedah – which upon completion will increase the group’s total warehousing capacity to around 9.5 million sq ft in FY2025.
