02.06.2015

Tat Hong decline continues

Singapore based crane rental group Tat Hong has reported its full year and fourth quarter results which show a further fall in both revenues and profits.

Revenues for the year were $608.6 million, 11 percent down on last year, while pre-tax profits plummeted 62 percent to $18.4 million. Mobile/crawler crane rental fell nine percent to $237.6 million partially due to the sale of Singapore based Hup Hin in July, partially offset by an improvement in Malaysia, while Australia, Hong Kong and Thailand remained flat. Tower crane rental, mostly in China improved eight percent to $96.6 million, thanks to a larger fleet which now numbers 934 cranes. General rental fell 17 percent to $55.9 million and distribution declined 18 percent to $218.5 million.

Looking at the fourth quarter total revenues dropped 12 percent to $136.6 million, while last year’s pre-tax profit of $8.3 million turned into a loss of $18.3 million, thanks to lower revenues. In terms of revenues by division, all were down for the quarter, with mobile crane rental falling 20 percent to $46.4 million, tower crane rental slipped three percent to $22.5 million, general rental by 23 percent to $11 million and distribution by six percent to $56.7 million,

Chief executive Roland Ng said: “FY2015 was a challenging year for Tat Hong which was made worse by the S$30.8 million charge we had to recognise for goodwill and asset impairments for our subsidiaries in Australia in view of the weak market conditions there.”

“While next year will be similarly challenging for our crane rental business, especially in Singapore and Australia, we do see some bright spots from our overseas operations. Our tower crane rental operations in China should continue to do well as its serves primarily the infrastructure, industrial and power generation sectors which are driven by government spending. Our distribution business, however, will continue to be a drag on our performance due to weak demand for heavy equipment in Singapore and the region.”

“In anticipation of challenges in the market, we have since two years ago embarked on a programme to unlock value from our non-core assets. In FY2015, we increased our efforts to trim our balance sheet and manage our costs. As a leaner Group, we will be able to navigate the uncertain macroeconomic environment better.”