AUTO dealer Tan Chong International posted a net loss of HK$35.9 million (S$6 million) for the first half of its 2024 fiscal year ended Jun 30 – a reversal from a net profit of HK$126.9 million over the same period a year ago.
Revenue dropped 9.9 per cent to HK$6.6 billion from HK$7.3 billion over the same period, said the company in its financial statements released on the Singapore Exchange on Thursday (Aug 29). Losses per share came in at 1.78 Hong Kong cents, compared with earnings per share of 6.30 cents last year.
The company has declared an interim dividend of 2 Hong Kong cents per ordinary share.
Tan Chong said that it faced significant challenges in H1 due to the uncertain global economic landscape.
The losses over this six-month period was due to the underperformance of its automotive division, which faced disappointing car sales and shrinking profit margins, said the company.
However, its financial services subsidiary, Ethoz Group, and its publicly listed logistics subsidiary, Zero, showed some growth.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
In Singapore, total industry volume for passenger cars and commercial vehicles expanded by 28 per cent year on year, as recovery in the supply of Certificates of Entitlement continues to pick up pace.
Tan Chong said that Nissan cars – which is one of the car brands it distributes – was able to ride on the recovery, registering a 38 per cent growth in sales in H1 2024 compared with the same period in 2023.
Its Subaru business in Singapore grew by 35 per cent over the same period, largely driven by strong sales performance of the Subaru Forester e-Boxer.
However, Tan Chong’s overseas markets could not replicate the success in Singapore. Its Subaru dealership in China posted a 57 per cent drop in sales, while it declined 51 per cent in Taiwan and a 33 per cent drop in volume in the Philippines.
Tan Chong expects to face continued headwinds from increasing geopolitical unrest, shifting consumer demand towards electric vehicles, and unforeseen stock-market fluctuations affecting its equity investments.
Despite the volatility of the current business climate, the group anticipates an improvement in performance for the remainder of the year. It said that it is seeing encouraging signs of recovery in its automotive division, with a promising order book for the second half of the year.
Tan Chong also announced that it is considering a potential separate listing of Ethoz Group on a recognised stock exchange. This aligns with the group’s long-term strategy for value creation and strategic growth, it added.
Shares of Tan Chong dropped 0.8 per cent, or HK$0.01, to close at HK$1.29 on Thursday.
