Leading Asian crane and equipment rental and distribution company Tat Hong Holdings reported group sales revenue for the three months to the end of September of S$109.8 million (US$ 77.6 million), a 20 percent decline on the S$137.4 million (US$ 97.0 million) for the same quarter a year ago.
In the crane rental division there was a 29 % decline in revenue to S$34.0 million (US$ 24.0 million) in the second quarter to the end of September 2016 from S$47.9 million (US$ 33.8 million) in the same period a year earlier. It was attributed to a lower utilisation rate in Singapore and the completion of projects and downward pressures on rental rates in Australia. The closure of a specialized transport business unit in Australia in April contributed to the decline.
The one bright spot in the crane rental business was the tower crane rental division in China which posted an increase of 11 % in the second quarter to S$25.5 million (US$ 18.0 million). Revenue in Chinese currency was up 21 % but “was eroded by a translation loss due to the weaker RMB against the Singapore dollar,” the company explained. Business was gained from new infrastructure, power generation, transportation and commercial building projects. The utilisation rate in the tower crane fleet was given as 83 %.
On the Group’s performance, Roland Ng San Tiong, Tat Hong managing director and group CEO, said, “Market conditions in the past quarter continued to be challenging, particularly in Australia and Singapore, and the impact is evident in our second quarter results. As macro conditions in the region are not expected to improve in the near future, the Group’s efforts in operational restructuring and cost containment will continue.”
For the first six months of the 2017 financial year, Tat hong Holdings revenue was S$ 226.6 million (US$ 160.0 million), down 18 % on the S$ 276.7 million (US$ 195.4 million) for the first half of the 2016 financial year.
In outlook the company said “the market weakness and the impending completion of projects in the ASEAN countries and in Australia will continue to impact the crane rental division. Efforts to reduce operating costs through fleet rationalisation and operational restructuring will continue.”
- The company has also announced that it will undertake a rights issue to raise S$ 41.1 million (US$ 29 million) “to strengthen the Group’s financial position and improve its financial flexibility.”