JOHOR BAHRU: Tiong Nam Logistics Holdings Berhad saw its net profit double to RM56.3 million in the financial year ended March 31, 2024 (FY2024) from RM27.9 million in the previous year, primarily due to fair value gains on several warehousing assets in Johor, a core component of its integrated logistics and warehousing services segment.
The largest contributor to these gains was a newly completed 1.1 million square feet (sq. ft.) mega warehouse in Senai Airport City, Johor, purpose-built under a long-term lease agreement with Mercedes-Benz Parts Logistics Asia Pacific to serve as its regional parts distribution centre.
Group revenue reached RM758.3 million in FY2024, a 4.5% increase compared to RM725.7 million previously, supported by contributions from both the logistics and warehousing services segment and the property development segment.
Tiong Nam’s logistics and warehousing services segment, the cornerstone of the Group’s operations, generated RM719.5 million in revenue, accounting for 94.9% of the Group’s total revenue. This represented a 1.7% growth from RM707.5 million a year ago, reflecting sustained demand for the Group’s integrated supply chain solutions across diverse industries, including food and beverage, information technology, electronics, automotive, and fast-moving consumer goods (FMCG) distribution, among others.
The property development segment also recorded growth, reporting RM34.8 million in revenue, increasing 145.1% from RM14.2 million in FY2023, driven by healthy demand for Tiong Nam’s residential projects.
Managing director Ong Yoong Nyock said: “Tiong Nam achieved significant growth in FY2024, reinforcing our position as a leading integrated logistics provider in Malaysia. Our strategic investments in expanding our nationwide network enable us to meet the growing demand for reliable and efficient supply chain solutions, particularly as the Malaysian economy recovers. Tiong Nam’s expertise and comprehensive solutions continue to make us the preferred partner for businesses seeking to optimise their supply chains, and we continue to ensure the seamless movement of goods across diverse industries.”
The Group’s ongoing expansion efforts involve the construction of four new warehouses in Johor Bahru, Kedah, Sabah, and Singapore. These projects, with a combined capacity of 1.3 million sq. ft., are slated for completion in FY2025 and FY2026. Consequently, the Group’s overall warehousing capacity is set to increase to 9.0 million sq. ft. in FY2026, up from 7.7 million sq. ft. in FY2024.
Moreover, the Group has outlined its plans to build five more warehouses with a total capacity of 1.0 million sq. ft. in Kedah, Johor, Selangor, and Penang, to be completed in phases from FY2026 until FY2028.
For the fourth quarter ended March 31, 2024 (4Q FY2024), group revenue demonstrated a 5.3% improvement to RM193.0 million, mainly on higher contributions from the logistics and warehousing services segment.
However, 4Q FY2024 net profit declined 62.5% to RM9.6 million from RM25.6 million a year ago, primarily due to increased operating expenses in the logistics and warehousing services segment, including expanded warehousing capacity, higher wages, and finance costs, along with fair value impairment on certain investment properties.
Despite these challenges, the property development segment’s contribution in Q4 FY2024, with revenue of RM2.4 million and a PBT of RM10.9 million, partially offset the impact on the Group’s results. The high PBT is largely due to the fair value change on inventories.
The segment’s ongoing project, comprising a commercial development of 58 units of double and triple-storey shop lots in Kota Masai, Johor, and future development phases are expected to contribute significantly going forward.
“While Q4 FY2024 saw temporary headwinds, our long-term growth strategy remains on track. We are actively enhancing our service offerings and operational efficiency to capitalize on the growing demand for integrated logistics solutions,” said Ong.
