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Tiong Nam’s 4Q FY2023 net profit surges more than eleven times to RM27.1 million

JOHOR BAHRU: Tiong Nam Logistics Holdings Berhad net profit surged more than 11 times in the fourth quarter ended March 31, 2023 (4Q FY2023) to RM27.1 million from RM2.3 million previously, due to fair value gain on warehouse investment property, firm demand for logistics and warehousing services, and lower share of associate loss.

The Group’s logistics and warehousing services segment posted healthy revenue, up 2.4% to RM174.8 million in 4Q FY2023 from RM170.7 million previously, attributable to new total logistics customers and business expansion from existing customers. This segment remains the largest contributor, accounting for 94.5% of revenue in 4Q FY2023.

Simultaneously, group revenue for 4Q FY2023 increased 4.6% to RM184.9 million from RM176.8 million in the previous year, on higher contribution from the logistics and warehousing services segment, as well as property development.

Its manaing director Ong Yoong Nyock said: “We posted resilient results in financial year ended FY2023, with growing number of customers for our total logistics solutions and business expansion from existing customers. Going forward, we will continue to expand our warehousing capacity to capture business opportunities on the back of an improving domestic economy.”

Mindful of market challenges of higher inflation and interest rates, he added they will also focus on strategic initiatives such as maintaining market share and improving efficiency.

Furthermore, he said they are fostering service innovation in their integrated logistics and warehousing services business to meet dynamic business requirements.

“We are committed to reinforcing our leading position of total logistics solutions in Southeast Asia, supporting efficient supply chains of domestic and multinational companies,” said Ong

For FY2023, group revenue improved 5.4% to RM727.3 million from RM689.8 million previously, mainly due to higher contribution from logistics and warehousing services segment. The improved revenue, in addition to lower share of loss from an associate, led to a jump in net profit to RM29.3 million from RM5.2 million previously.

In its ongoing warehousing expansions, Tiong Nam is on track to complete a new 1.1 million square feet (sq ft) of RM200 million mega-warehouse facility for lease to Mercedes-Benz in Senai, Johor. The warehouse, currently over 90% completed, is expected to be operational in November 2023 and generate long term recurring income.

The Group is also constructing three new warehouses and planning another six across Johor, Selangor, Penang, and Kedah. Upon completion, the Group’s warehousing capacity will increase to 7.9 million sq ft in FY2024 from 6.8 million sq ft previously.

Besides, Tiong Nam also has a joint venture with Johor Corporation, entered in August 2022, to build and co-develop a 300-acre state-of-the-art, high-tech logistics park in Sedenak Technology Valley, Johor. The project is currently under planning stages.