Tiong Woon down in half year but hopeful for future

Half year results for Tiong Woon Corporation (TWC) are down but its heavy lift segment shows signs of future growth.

The Singapore-based oil & gas and petrochemical services company recorded turnover of SG$56.1 million (US$39.8 million) in its heavy lift and haulage division for the first six months of the 2010 fiscal year, ending 31 December 2009. That compares to SG$64.4 million ($45.7 million) for the first six months of 2009 financial year, mainly due to declines in core markets Thailand, Indonesia and China. There was also a drop in utilisation rates for its lower capacity cranes, said the company.

Profit before tax at the segment stood at SG$16.9 million ($12 million) compared to the SG$26.2 million ($18.6 million) recorded on 31 December 2008. This was largely driven by lower turnover and to a smaller extent, higher depreciation and maintenance costs for the group's heavy equipment, said Ang Kah Hong, TWC group chairman and managing director.

"We are starting to see signs and indicators that our markets are beginning to pick up. Coupled with strong fundamentals and positive growth drivers in the oil & gas and petrochemical industries, we remain optimistic about the longterm prospects of our business," added Ang.

The next highest contributor to Tion Woon's total revenue was the fabrication and engineering segment with SG$15.4 million ($10.9 million) against S$15.2 million ($10.8 million) in the preceding corresponding period. Revenue from its maiden derrick pipe-lay barge project was fully recognised during the half year ending 31 December 2009.

However, despite the slight increase in turnover for the period, there was a loss of SG$3.4 million ($2.4 million) due to higher subcontractor and incidental costs incurred towards the completion of the barge project

The marine transportation segment generated SG$5 million ($3.5 million) in turnover, falling 27% from SG$6.9 million ($4.9 million) over the same corresponding period. The segment turned in a profit before tax of SG$0.2 million ($142,000), down 95% from the previous corresponding period, largely attributed to a fall in revenue and higher depreciation costs for its tugs and barges.

The group posted a net profit of SG$11.6 m ($8.2 million). This was compared to the SG$23.1 million ($16.3 million) net profit achieved in the first six months of 2009 financial period. Group turnover stood at SG$82.3 million ($58.3 million), 14% lower than the S$95.5 million ($67.6 million) in previous corresponding period.

The group's focus in the near term will continue to be its key markets in Asia and the Middle East, said the company. Going forward, the group will continue to build on its strengths, including heavy lift and haulage. The company also plans to expand its geographical footprint.