Tan Chong Q4 net profit down

PETALING JAYA: Tan Chong Motor Holdings Bhd saw fourth quarter net profit drop 87% to RM8.67 million for the quarter ended Dec 31, 2014, from RM67.84 million a year ago, on lower revenue and operating profit.
Its revenue fell 7% to RM1.26 billion from RM1.35 billion in the previous corresponding period.
For FY14, the group's net profit dropped 58% to RM105.85 million from RM250.95 million as the automotive division recorded lower revenue due to the highly competitive business environment.
Its revenue was 8.4% lower at RM4.76 billion compared with RM5.2 billion in FY13.
Tan Chong said prospects remain challenging in view of uncertainties in the global economy following sharp decline in crude oil prices and unresolved Eurozone financial crisis. The weakening of the ringgit has also added pressure on the imported costs of materials required in the automotive industry, it said.
"In addition to the global economic factors, higher costs of living and the impending implementation of the Goods and Services Tax will be the two major concerns affecting the consumer behaviour. There will be foreseeable slowdown in consumers' spending in the light of these factors. The tightening of lending guidelines by banks including hire purchase financing will restrict the purchasing power of potential car buyers," Tan Chong said in a filing with Bursa Malaysia.
The group said it will continue to be prudent and control capital and operating expenditures.
It said expenditures will have to be prioritised at this juncture to combat challenges faced by the group and it will take diligent steps to monitor the foreign currency risk and maintain the business competitiveness throughout the year to ensure its sustainability.