Automobile company Tan Chong International yesterday reported a 177 per cent surge in half-year net profit after belts were tightened - and despite a decline in revenue.
Profits stood at HK$330.3 million (S$57.3 million) for the six months to June 30, even as revenue fell 9 per cent to HK$8.03 billion on the back of a slowdown in vehicle sales.
The group attributed its stronger earnings to "significant reduction" in distribution costs and administrative expenses, as well as rises in other operating incomes.
"Starting last year, the group embarked on a concerted effort to reduce cost while improving productivity at all levels of the organisation," it said in its results announcement. "These actions have improved the company's financial positions in the current period, ensuring our long-term competitiveness and sustainability."
Tan Chong said long-term headwinds persist in greying Japan, while tightened government automotive policies in mainland China and upcoming vehicle emissions rules in Singapore also squeezed growth.
But it is banking elsewhere on tweaked product ranges and new models for Subaru vehicles.
Passenger vehicle sales are picking up in Thailand and Malaysia, where there is growing confidence in the Subaru brand, the group said.
AT A GLANCE
REVENUE: HK$8.03 billion (-9%)
NET PROFIT: HK$330.3 million (+177%)
DIVIDEND: 2.5 Hong Kong cents (+25%)
Its Tan Chong Subaru Automotive (Thailand) subsidiary in February set up a joint venture with Subaru Corporation and the group said it is focused on starting production of Subaru vehicles in 2019 for export to South-east Asian markets.
Earnings per share stood at 16 Hong Kong cents, against six HK cents a year earlier, while net asset value was HK$6.23 a share, up from HK$6.10 as at Dec 31 last year.
An interim dividend of 2.5 HK cents a share has been declared, up from 2 HK cents a year earlier.
"The group will continue to focus on improving cost efficiencies and has started to see visible results from its efforts," Tan Chong said.
It will also "persist on pursuing the development of necessary infrastructure and distribution networks to strengthen the group's foundation, while keeping close monitoring of the prevailing uncertainties in the Asian markets".