Crane and heavy equipment supply giant Tat Hong Holdings has cancelled its plan to list its Chinese tower crane rental division. Shares in the Asia-based group were down 2.6 % on the news last week.

The company said that its 82 %-owned Tat Hong Equipment Service Co. Ltd in China will not proceed with the listing of its shares on the Taiwan Stock Exchange due to the “current global economic environment as well as the weak and volatile global equity markets [which are] not conducive to the listing of THES and that any valuation of THES at this point in time would not [be] commensurate with its intrinsic value,” a Tat Hong statement said.

Tat Hong did not rule out the possibility of listing the company at some point in future.

For the full year 2016 (12 months ended 31 March 2016) Tat Hong reported revenue down 13 % to S$ 528 million from S$ 608 million the year before. That translated into a loss of S$ 39 million compared with a net profit of S$ 4.9 million the year before. Impairment charges, foreign exchange losses and losses from exiting an excavator distribution in Indonesia accounted for S$ 32.7 million of that total in the 2016 figures.

Revenue from the crane rental division was down 21 % to S$ 188.4 million. It was mainly due to the completion of projects in Australia, Malaysia and Thailand partially compensated by better contribution from new customers and projects in Indonesia, the company said.

Roland Ng, Tat Hong managing director and Group CEO, said, “Whilst the continued market weakness in Australia and soft demand in the ASEAN region had weighed down earnings, it was the non-cash impairment charges, unrealised foreign exchange losses, as well as losses and provisions associated with exiting the excavator business in Indonesia that caused the Group to be in the red in FY2016. Had it not been for these one-off items in FY2016, the Group would have turned in an improved performance compared with FY2015.

“Looking forward to FY2017, we expect demand in many of our markets to be subdued. Our operations in Australia may come under further pressure unless more infrastructural projects come on-stream as many of its LNG-related projects are approaching completion. We have taken steps to right-size our operations in FY2016 and efforts to trim operating costs will continue.”

Roland Ng went on to say that the outlook was brighter for the tower crane rental business in China because the second half of the year to 31 March 2016 saw a strong rebound in utilisation. This increased from 70.2 % to 76.4 %, the company said.

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