Tan Chong Motors’ 2Q swings to a net loss of RM79.4m

by BERNAMA/ pic credit: ANNUAL REPORT

TAN Chong Motor Holdings Bhd’s second-quarter (2Q) results were significantly affected by the Covid-19 pandemic, swinging into a net loss of RM79.36 million compared to profit of RM19.05 million for the same quarter last year.

For the 2Q ended June 30, 2020, revenue dipped to RM512.9 million versus RM1.06 billion previously.

“The local businesses were unable to operate during the Movement Control Order (MCO) period. The showrooms and aftersales service centres resumed operations during the Conditional MCO in May.”

Similarly, the businesses in the overseas markets have also been affected by the pandemic, albeit to a lesser extent, it said in a Bursa Malaysia filing yesterday.

It said the disruptions had led to a decline in revenue and Ebitda of the automotive division compared to the preceding year.

For the first half of the year (1H20), net loss was RM88.62 million against RM35.4 million, while revenue stood at RM1.2 billion compared to RM2.14 billion previously.

It said the short-term National Economic Recovery Plan, which includes full sales tax exemption for locally assembled vehicles from June 15 to Dec 31, 2020, has brought back customers’ interest to purchase new vehicles.

“If the customers’ buying interest can gain sustainable traction, this may point to some recovery of motor vehicle sales in the 2H20.”

In response to the challenging conditions caused by the pandemic, the group has since rationalised its operations and expects to further mitigate the adverse impact through other cost-containment initiatives in order to maintain a sustainable financial position.

It will continue to take active measures to improve competitiveness in all the markets it operates in and maintain focus on the key business strategies to drive business growth and achieve operational sustainability.