Tan Chong Motor Holdings Bhd’s pre-tax profit dropped more than half to RM41.9 million for the second quarter ended June 30, 2009 against RM84.006 million chalked up in the previous corresponding quarter.
In an announcement to Bursa Malaysia, the company said revenue fell to RM698.1 million, for the quarter under review, from RM783.7 million previously while earnings per share was almost halved at 5.34 sen sen.
For the first half year, pre-tax profit fell to RM90.6 million from RM151.11 million reported in the corresponding period last year.
However, revenue rose to RM1.4 billion from RM1.5 billion previously while earnings per share fell to 11.6 sen from 18.31 sen.
The company declared a 10 per cent interim dividend, less tax of 25 per cent, for the year ending December 31, 2009 to be paid to shareholders on September 28.
In 2008, the company declared the same dividend but less income tax of 26 per cent.
In reviewing its performance, Tan Chong said the local economic environment remained challenging and the automotive sector continued to adapt to market circumstances.
In the first six months of 2009, sale of Nissan passenger and commercial vehicles increased 2.8 per cent to 14,082 units.
Tan Chong said both its flagship brands, Nissan cars and UD trucks, registered a combined 6.0 per cent share of the total industry volume.
“With a disproportionately larger cutback in US dollar and Japanese yen import orders and a weak Ringgit, our focus in the first half was to contain risk and generate positive working capital,” it said.
Tan Chong added it reduced inventories by 39 per cent, increased free cash flow by RM443.4 million and returned the group to a net cash position.
On prospects, it said with a stronger ringgit, completely knocked down orders have returned to normal since June to meet deliveries in October-November.
The company anticipates the negative production variances in the first half to reverse in the fourth quarter once production increases significantly to meet bookings.
“Tan Chong expects higher deliveries in the third quarter due to heavy bookings,” it said an expects a rebound in the fourth quarter onwards.
“However the pace of the recovery is still in question. We aim to catalyze the improvement, however modest, with new products and investments in productivity,” the company added. — BERNAMA