Tiong Nam’s 2Q net profit jumps on higher logistics and warehousing revenue

• Tiong Nam managing director Ong Yoong Nyock said the demand for its logistics and warehousing business is poised to further increase amid the economic recovery in the country.

KUALA LUMPUR (Nov 29): Tiong Nam Logistics Holdings Bhd posted a more than five-fold rise in net profit to RM1.65 million for its second quarter ended Sept 30, 2022 (2QFY2023), from RM254,000 a year earlier, on the back of a higher revenue for its logistics and warehousing services segment.

Earnings per share increased to 0.25 sen from 0.05 sen in 2QFY2022, the group’s bourse filing showed.

Quarterly revenue rose 7.02% to RM176.9 million from RM165.37 million, with the logistics and warehousing services segment contributing RM175.6 million, up 7.7% from RM163.1 million previously.

The dormitory segment, however, saw its revenue falling by 94.4% to RM131,000 from RM1.8 million, as the group de-consolidated its hotel business.

For the first six months of FY2023, the group’s net profit increased 12.75% to RM2.03 million from RM1.8 million in the previous corresponding period, as revenue rose 6.8% to RM354.86 million, from RM332.29 million.

In a statement, Tiong Nam managing director Ong Yoong Nyock said the demand for its logistics and warehousing business is poised to further increase amid the economic recovery in the country.

“We are in the midst of expanding warehousing capacity to support current customers’ expansions and onboard new customers.

“We are also on track to see our MNC (multinational corporations)’s revenue contribution increase to 45% in 2025 from about 35% in 2022, as businesses increasingly invest in Southeast Asia for greater supply chain resilience,” said Ong.

He added that the group would undertake a capital expenditure of RM218.7 million over two years until FY2024 to expand its logistics and warehouse networks that involve new warehouses in Kedah and Johor.

Ong said Tiong Nam is well-positioned to benefit from the proposed development of a high-tech logistics hub on a 300-acre plot of land in Sedenak Tech Valley, Johor, in its collaboration agreement with JLand Group Sdn Bhd.

“We look forward to formalising a joint venture with JLand in the near future, and are excited to jointly undertake the development, which will focus on driving greater connectivity in regional and international trade, and increase the logistical efficiency and productivity of the state of Johor,” he said.

Tiong Nam’s share price closed two sen or 3.03% higher at 68 sen on Tuesday (Nov 29), giving it a market capitalisation of RM358.92 million.