SINGAPORE (Aug 25): Motor company Tan Chong International reported earnings for the half year ended June nearly trebled to HK$330.3 million ($57.4 million) from HK$119 million a year ago.
Revenue fell 9% to HK$8.03 billion with 16,435 units sold from HK$8.9 billion a year ago with 20,038 units sold mainly affected by a slowdown in vehicle sales volume.
However, EBITDA and profit registered positive increases to HK$679 million and HK$411 million respectively, due largely to improve operating profit margin of 6.9% when compared to 3.9% a year ago.
In the first six months, the group faced some margin compression in Singapore with COE coming under pressure and pending Euro 6 emission implementation.
“Together with the shift in focus from Nissan passenger vehicles to Nissan commercial vehicles, exacerbated by differing COE cycles, the revenue and profitability were adversely affected,” says Tang Chong in its filing.
Meanwhile, the China domestic market continued to face further slowdown in growth due to the continued tightening of government automotive policies.
“Our Subaru passenger sales faced further competition from larger incentives offered by other automotive brands. The group’s seat manufacturing operations in Nanjing has started to experience a slower order volume as well, affected by the increasingly onerous conditions in the domestic automotive market,” says Tan Chong.
The board has declared an interim dividend of HK$0.025.
Shares in Tan Chong closed at $2.37 on Friday.
