29.05.2013

Profit surge at Tat Hong

Singapore based crane sales and rental group Tat Hong has reported a strong increase in profits for its fiscal year 2012/13.

Total revenues were up 16 percent to $836.9 million, while pre-tax profits jumped 77 percent to $102.4 million.
Looking at the four main divisions

Distribution revenues were $362.3 million seven percent up on the prior year, thanks in part to a large sale to a Japanese crane rental company. Sales in the fourth quarter improved 12 percent.

Crane rental- mobiles and crawlers – saw revenues rise by 37 percent to $307.4 million, with improvements in every region. The upward trend slowed slightly in the fourth quarter with revenues up 11 percent.

Rentals of general equipment, which is largely based in Australia fell four percent to $92.6 million, with the fall accelerating in the fourth quarter which down 15 percent on the same period last year.

The tower crane rental division, which is mostly based in China, posted revenues for the year of 75.5 million, 27 percent up on the year, with the growth continuing into the fourth quarter – up 28 percent, due mostly to a larger fleet.

A company statement said: “the group expects its Crane Rental division to perform well in 2014 as the outlook for its key markets in Southeast Asia and Hong Kong remains positive. The operations in Australia will continue to benefit from committed and new project starts especially in the oil and gas sector.”

“The Distribution division is expected to maintain its performance, while the Tower Crane Rental division is expected to maintain its growth momentum, with its strong base of on-going projects and new opportunities in the building, infrastructure, transport and power generation sectors arising from increasing urbanisation.”

“The General Equipment division is expected to maintain a satisfactory performance through product and market diversification. Given the economic and sector outlooks of its key markets and barring unforeseen circumstances, the group is generally optimistic of its performance for FY2014.”

Vertikal Comment

This is an excellent set of numbers from Tat Hong which is constantly on the move, one has to wonder though about its general rental business. One cannot but wonder if it would not be better exiting this sector and investing the funds in its other businesses.

This aside the group is very well poised to benefit from the numerous opportunities for growth in the region.