Sin Heng Heavy Machinery, one of the leading heavy lifting service providers in Singapore focusing on the mid-to-high lifting capacity segment, has seen its earnings impacted last year due to the economic slowdown but is now seeing a recovery in demand and buying interest, moving into the current year.

For the six months ended 31 December 2009 (1H FY2010), the group reported a 34.2% drop in comprehensive income to $10.4 million on an 11.2% decline in revenue to $71.2 million.

This was mainly due to a 14.3% decline in revenue from its trading business to S$54.6 million as a result of lower sales from both cranes and aerial lifts due to the unfavourable global economic condition.

Revenue from its equipment rental business, however, held steady at $16.6 million, but gross profit fell 12.1% to $5.9 million due to a combination of factors, such as lesser overtime work from its rental customers; an increase in depreciation charges and an increase in maintenance costs — both resulting from an increase in rental fleet size.

Based on the group’s 1H FY2010 results, the group’s earnings per ordinary share (based on weighted average shares of 371,640,000) is 2.67 cents, while its net asset value per ordinary share is 16.50 cents as at 31 December 2009.

Directors are recommending an interim tax exempt (one tier) dividend of 0.45 cents per share, which amounts to close to 23.1% of the group’s 1H FY2010 net profit.
As Sin Heng is strategically focused on higher lifting capacity cranes that can undertake larger projects, the group has conscientiously built up its fleet of mid-to-heavy lifting capacity cranes and aerial lifts in recent years.

As at Dec 31, the group owns a fleet of 73 cranes with a combined lifting capacity of more than 7,900 tonnes. This translates to an average lifting capacity of 108.5 tonnes/crane as at Dec 31. In addition, Sin Heng owns a fleet of 216 aerial lifts, with access heights of up to 45.7 metres.