Tan Chong net profit down 95.5% in 2020 amid pandemic restrictions

CAR company Tan Chong International was hit hard by the Covid-19 pandemic in the last financial year, with profit attributable to shareholders plunging 95.5 per cent to HK$9.51 million (S$1.65 million) for the year ended Dec 31, the mainboard-listed firm said in its results release on Tuesday after market close.

In the 11 countries where it is active, government lockdowns and restrictions had a significant impact on its business, said Tan Chong, adding: "In view of the Covid-19 pandemic, the group experienced a drastic slowdown in all its markets except for its Vietnam operations."

Revenue for the year fell 15.2 per cent to HK$12.3 billion, due mainly to a 35 per cent fall in sales volume for Tan Chong's motor vehicle distribution and retail division.

Revenue for its transportation and logistics business, represented by Zero in Japan, fell 4 per cent. Its net profit contribution to the group fell 11 per cent.

The relative strength of the yen, as well as falls in other income, resulted in profit from operations falling 52 per cent to HK$274 million.

Noting the introduction of vaccines, Tan Chong said it "continues to push ahead with ongoing cost reduction programmes and productivity initiatives", to evolve into a leaner and more competitive organisation.

"The group continues to focus on the expected high rate of industrialisation in Vietnam and Thailand, and where prudent and justified, to continue necessary investment to benefit from the vast opportunities for our group's automotive business in the region," it said.

Earnings per share were 0.47 Hong Kong cents, down from 10.58 Hong Kong cents in 2019.

The board has recommended a final dividend of three Hong Kong cents per share, bringing the total dividend for the financial year to four Hong Kong cents per share.

Tan Chong shares closed unchanged at HK$2.03 on Tuesday before the results release.