SINGAPORE (May 30): Tat Hong, one of the largest crane rental company in the Asia Pacific region which is in the process of being privatised by controlling shareholder Roland Ng, reported 4Q losses narrowed 81% to $5.6 million from a year ago.
This was the result of lower pre-tax losses and lower income tax expense arising mainly from over-provisions made for prior years’ taxes and the utilisation of prior years’ tax losses and capital allowances.
4Q revenue rose 8% to $119.3 million. Revenue from crane rental decreased 6% to $28.6 million in 4Q18, due to lower crane utilisation rates in Malaysia, Thailand and Hong Kong as major contracts were nearing completion and while new projects were delayed.
But revenue from the tower crane rental division increased 31% to $27.3 million due to higher tonnage rented out while revenue from general equipment rental division increased 21% to $13.5 million mainly due to improved utilisation rate as well as more public infrastructure projects secured.
Revenue from the distribution division increased 4% to $49.8 million mainly due to higher crane equipment sales in Australia and Hong Kong.
Gross profit improved 30% to $34.6 million in 4Q18 on the back of improved margins from crane rental and general equipment rental divisions in Australia and stable margin from the distribution divisions in Australia and the Asean region, as well as tower crane rental division in China.
Group’s total operating costs decreased 26% to $38.1 million in 4Q18 primarily arising from savings in manpower costs, rental, transport expenses, insurance cost, freight and packaging expenses, lower provision for doubtful debt as well as lower foreign exchange losses of $1.6 million compared with $5.1 million in 4Q17. In addition, operating costs in 4Q17 had included impairment losses of $3.8 million.
For FY18, losses came in at $15.9 million, 58% lower than losses of $38 million a year ago.
Looking ahead, Tat Hong says while the business climate for the crane rental market and other sectors in which the group operates in China and Australia is positive, there may be weaknesses arising from challenging market conditions in certain parts of the Asean region and new environmental regulations in China.
On May 21, Tat Hong announced the percentage of the total number of issued shares -- excluding treasury shares. -- which are held in public hands had fallen below 10% after the close of the 55 cents per share offer by Ng. As a result, SGX will suspend the trading of its shares.
