Main slider - 2
previous arrowprevious arrow
next arrownext arrow

Filter By Year :  Latest |  2023 |  2022 |  2021 |  2020 |  2019 |  2018 |  2017 |  2016 |  2015 |  2014 |  2013 |  2012 |  2011 |  2010 |  2009  |  All

Quarterly Report For The Financial Period Ended 31 December 2023

Condensed Consolidated Statement Of Profit Or Loss For The Quarter Ended 31 December 2023

Statement Of Profit Or Loss For The Quarter Ended 31 December 2023

Condensed Consolidated Statement Of Financial Position As At 31 December 2023

Financial Position Quarter Ended 31 December 2023

Analysis Of Performance Of All Operating Segments

For the quarter ended 31 December 2023, the Group recorded revenue of RM643.8 million, a reduction of 12.9% compared to the same period preceding year, largely due to continued challenges arising from supply chain constraints, lack of timely refreshed product line-up and stiffer competition faced in the local and overseas markets. In line with the lower revenue and lower margin, the Group recorded Loss Before Tax ("LBT") of RM63.3 million in the current quarter under review, compared to LBT of RM38.0 million in the same period preceding year.

For the financial year ended ("FYE") 31 December 2023, the Group recorded revenue of RM2.53 billion, 17.0% lower compared to the same period preceding year. As a result, the Group recorded LBT of RM121.1 million in current year-to-date period compared to LBT of RM14.2 million in the same period preceding year. The reduction in profitability was mainly due to lower sales and lower margin resulting from a weaker Ringgit.

As at 31 December 2023, the Group’s retained earnings was RM1.52 billion. The net assets per share as at 31 December 2023 was lower at RM4.20, compared to RM4.40 as at 31 December 2022.

Further analysis of the performance of the business segments is as follows:

  1. Vehicles Assembly, Manufacturing, Distribution & After-Sales Services ("Automotive")

    The automotive division recorded lower revenue of RM579.1 million in the current quarter under review, a reduction of 19.4% compared to same period last year ("QoQ"). The reduction in sales was mainly due to stiffer competition faced in the local and overseas markets. Loss Before Interest, Tax, Depreciation and Amortisation ("LBITDA") of RM6.4 million varied by -111.3% QoQ, mainly due to lower revenue and lower margin arising from weaker Ringgit during the current quarter under review.

    For the FYE 31 December 2023, the automotive division recorded revenue of RM2,365.6 million (- 20.4% YoY) and EBITDA of RM34.9 million (-73.8% YoY). The EBITDA was lower due to the same reasons as explained in the preceding paragraph.

  2. Financial Services (Hire Purchase and Insurance)

    The financial services division recorded revenue of RM17.1 million in the current quarter under review (+2.4% QoQ) and EBITDA of RM1.5 million (-44.3% QoQ). EBITDA was lower mainly due to higher provision for impairment loss on hire purchase receivables in the current quarter under review compared to the same period preceding year.

    For the FYE 31 December 2023, the financial services division revenue remained at RM66.4 million compared to last year. However, EBITDA was lower at RM15.8 million (-42.5% YoY), mainly due to higher impairment loss on hire purchase receivables recognised in current year-to-date period compared to the same period preceding year.

  3. Other Operations (Investments and Properties)

    Revenue from Other Operations was higher at RM47.7 million in the current quarter under review (+1,105.7% QoQ) and registered an improved LBITDA of RM7.7 million in the current quarter compared to LBITDA of RM47.0 million in the same period preceding year (+83.6% QoQ), mainly due to lower net foreign exchange loss which arose from transactions and outstanding balances denominated in foreign currencies.

    For the FYE 31 December 2023, revenue from Other Operations was higher at RM100.7 million (+637.6% YoY) and EBITDA of RM34.7 million was higher by 15.5% YoY, mainly due to higher net foreign exchange gain which arose from transactions and outstanding balances denominated in foreign currencies.

Future Prospects

The global economy has been resilient in its recovery from the COVID-19 pandemic, projected to grow by 3% in 2024 amid escalation of geopolitical tension and inflationary pressures. On the domestic front, the economy expanded by 3%1 in the fourth quarter of 2023 and is expected to expand further by 4%-5% in 2024, supported by recovery in exports and domestic consumption. The Malaysian Automotive Association ("MAA") projected a lower total industry volume of 740,000 units in 2024 given the uncertainty in the global economy and consumer spending may slow down due to the rising cost of living, implementation of proposed High Value Goods Tax and higher service tax rate for certain services including motor vehicles repair and maintenance.

The Group had recently launched the New Nissan Almera KURO (Black Edition) for the local market with enhanced aesthetics that exude a higher level of sporty sophistication and poise. This is in line with the Group’s aspiration to offer high-tech, high-value products that are affordable and economical to run. The Group has also planned for other new models to be introduced in the months ahead, and these will be the catalysts for future sales growth in the local market.

In Vietnam, the Group had in November 2023 launched the locally assembled ("CKD") version of the Wuling N300P light truck which was branded under Tan Chong’s own Truckquip ("TQ") brand. On another note, the Group had also entered into an Agreement of Distribution and Service ("Agreement") with GAC Motor International Co., Ltd., a subsidiary of Guangzhou Automobile Group Co., Ltd. ("GAC Group") as a distributor to import, distribute and sell GAC vehicles, spare parts, and provide after-sales services. Both CKD TQ light truck sales and GAC distributorship will provide the Group with the opportunity to reestablish its foothold in the automotive industry in Vietnam.

For Laos and Cambodia markets, we will be launching the new Nissan X-Trail e-POWER in February 2024 and early March 2024. The early response and feedback from the markets has been promising and is expected to add further strength to existing sales momentum in the said markets.

The Group’s first Floating Large-Scale Solar Photovoltaic (LSSPV) plant in Serendah, Selangor has successfully commenced operations in providing green, renewable energy on 5 January 2024. The floating solar plant built on Sungai Rawang - Serendah Lake is expected to supply 1,043,114 MWh of green energy to Tenaga National Berhad under a 25-year Power Purchase Agreement (PPA). This will contribute to a reduction of 610,221 tonnes of CO2 (Carbon Dioxide) emissions to the atmosphere, equivalent to removing 132,656 units of cars from the road, or the planting of 29,058,175 trees. The Group will continue to pursue other renewable energy segments as part of its ESG efforts, contributing to the energy transition in Malaysia and the global markets.

Amid all the challenges faced, the Group remains steadfast in its focus to build a sustainable business by driving better operational efficiencies, efficient cost management and cash flow management, firmly placing the Group in a strong position to achieve long term operational and financial sustainability.

1 Bank Negara Malaysia Quarterly Report dated 16 February 2024.

Tan Chong Motor Holdings Berhad

Tan Chong Motor Holdings Berhad