28.05.2012

Tat Hong up 23%

Singapore based crane and equipment company Tat Hong saw revenues rise 23 percent for the fiscal year to the end of March.

Total revenues were s$719.76 million ($563.8 million) 23 percent higher than the previous year, looking at the company’s main sectors, mobile crane rental improved 22 percent to s$225 million ($176 million) gathering pace in the fourth quarter when sales were up 50 percent. Much of the increase came from Singapore and the surrounding are. The fleet increased from 573 units last year to 627 this year, with growth in all sizes except 100 to 199 tonnes.

Tower crane rental, which is mainly in China, was the slowest part of the business growing just three percent to s$58.7 million ($46 million) The company said that in spite of this utilisation improved at Jiangsu Zheng He
Tat Hong Equipment Rental and that now it has bought out its local partner and installed a new management team, it expects this to improve.

Distribution grew by 25 percent to s$339.2 million ($266 million) thanks to higher sales in Australia along with excavator sales to Indonesia and Vietnam. And finally general equipment rental improved by 39 percent to s$96.9 million ($76 million) thanks again to the strong Australian market.

Pre-Tax profits were up 43 percent to s$58 million ($45.4 million)

Tat Hong’s managing director, Roland Ng said: “In 2012 we took steps to streamline some areas of our operations, particularly in China where we incurred a one-off accounting loss in our 52.3 percent subsidiary – Si Chuan Tat Hong Yuan Cheng Machinery’s disposal of its crane assets in a public auction. Despite this, we are pleased to have ended the year with strong growth both in our top and bottom lines”.

“Moving forward, we are optimistic about our performance in 2013 because our Australian operations are looking particularly strong with encouraging demand for equipment and services arising from on-going post-disaster rebuilding programmes and growth opportunities from the resource and infrastructural sectors in Western Australia and Queensland. We are also expecting more projects from the Northern Territory in the near future.”

“The Crane Rental division is also expected to continue its growth momentum in 2012/2013 because of the tremendous opportunities presented by major infrastructure and construction projects in Singapore, Hong Kong and other Southeast Asian markets. Now that various local shareholders’ issues in China, have been resolved, the management of the Tower Crane Rental division expects to turn in a better performance in 2013, especially with a renewed focus to increase utilisation rates and productivity in supporting the on-going and new large building and infrastructure projects in Shenyang, Tianjin, Wuhan, Chongqing, Sichuan and Guangdong. The revival of approval for new nuclear plants in China is also expected to bring new opportunities.”

Vertikal Comment

This is a very strong performance from Tat Hong, with most of its operations really beginning to ‘hit stride’ if the changes in the Chinese tower crane operation come good, the company should have an exceptional year. The he overall trends suggest that the company will see a similar level of improvement, while profits are likely to double.

Some good upside potential could also see this company break the s$billon revenue level in 2013/14.