Tower cranes shine for Tat Hong
25 May 2010
Revenue at Tat Hong Holdings was down 22% overall for the 12 months to 31 March 2010 but it was up 37% in the tower crane rental division.
In figures, the Singapore-based crane rental and equipment sales group showed total revenue down from S$632 million (US$446 million) in the year ending 31 March 2009 to S$495 million (US$349 million) in the year ending 31 March 2010. Tower crane rental was up from S$25 million (US$18 million) in 2009 to S$34 million (US$24 million).
It was a similar increase (34%) for the tower crane rental division in the last quarter of the financial year, from S$6.3 million to S$8.5 million (US$4.4 million to $6 million). Contributing to the growth was an expanded rental fleet, a utilisation rate of 74% and the first contribution from the Group's latest subsidiary, Beijing Tat Hong Zhaomao Equipment Rental Co., Ltd, Tat Hong said.
In the general crane rental division, which includes around 700 crawler and wheel mounted cranes, performance was adversely affected by projects in Australia being deferred. Reflecting this, revenue was down 8% for the year, from S$180 million to S$165 million (US$127 million to US$116 million). Contributions were down from Indonesia, Malaysia and the Middle East.
In the last quarter, however, revenue in the general crane rental division increased 9% from S$39 million to S$42 million (US$27 million to US$30 million). Some of the previously deferred projects in Australia started and Indonesia contributed higher revenue due to demand from power plant projects.
"FY2010 has been a difficult year for us, especially for our Equipment Sales division, which was significantly impacted by the global financial crisis. However, we are starting to observe initial signs of a gradual economic revival, as evidenced by our improved Equipment Sales performance in 4QFY2010. Sales inquiries have increased and many of these inquiries have translated into actual crane and equipment purchases. Crane Rental, our consistently resilient business segment, has continued to provide stable returns.
"It is still early days to predict a complete recovery story but our confidence level is high for certain key markets with promising prospects, such as Australia, China, Indonesia, Vietnam and Hong Kong. Moving ahead, we will continue to build on our reputable expertise and proven track record to capitalise on future growth opportunities," said Roland Ng, Tat Hong Holdings president and group chief executive officer.
In outlook, Ng said, "We are greatly encouraged by the commendable improvement for our Equipment Sales division this quarter, as this signals that market confidence could have started to recover and customers are actively procuring for projects again. If this trend continues for this Division, our FY2011 performance will be strengthened.
"In addition, the Australian market has also reported that major resources and infrastructure projects that were previously deferred are expected to commence in FY2011. Should all these committed projects proceed as planned, we can anticipate a positive impact for our business divisions, in particular, our Crane Rental segment.
"In China, we expect to maintain our consistent growth momentum for our Tower Crane Rental division, riding on several committed power plant and infrastructure projects in the country," concluded Ng.
