Tiong Woon increases profits as turnover drops
18 February 2014Singapore rental company Tiong Woon has reported a rise in net profit and a dip in turnover for both the quarter and the half-year. In its second quarter results, the firm recorded a 46% increase in net profit of SGD13.4m on SGD89m turnover this was down 10%. The company explained these financial changes were mainly due to lower contributions from Engineering Services and Trading divisions.
Reporting the turnover of the core Heavy Lift and Haulage division Tiong Woon saw a 1% rise to SGD75.2m, which amounted to 84% of Group revenue and 88% of Group profit before tax (PBT). Explaining the PBT margins for this division the company said that they reflected Tiong Woon's involvement in more integrated heavy lift and haulage projects that involved integration with engineering services, marine transportation, and project management.
The cost of property, plant and equipment for the quarter was was SGD316m as compared to SGD307.4m in the prior quarter. Tiong Woon explained that this was due to its ongoing investment in higher specification and specialised machinery.
Speaking of the company's future financial outlook Tiong Woon said it expected resilient demand for heavy lift and haulage from the oil and gas, and petrochemical industries. In Singapore, Tiong Woon said that its heavy lift and haulage businesses would be supported by the strong pipeline of public and private sector housing, petrochemicals and infrastructure projects. The company said that it would also be targeting similar opportunities in these sectors in other ASEAN countries and the Middle East.
Describing its business strategy Tiong Woon said it would attempt to forge strategic alliances and cooperation with international contractors and industry players to jointly participate in the bidding for projects. The company believed that while there are ample business opportunities, they anticipated that labour and other operating costs would continue to be on the rise. To improve productivity and operational efficiency, Tiong Woon would continue to upgrade the skills of its workforce. Tiong Woon would stay competitive by making continued improvements in operational efficiency, cost control and prudent financial management. It will continue to invest in higher capacity and specialised equipment, so as to widen the range of service offerings to its clients.
Ang Kah Hong, Tiong Woon's group chairman and managing director, said: "We have maintained a steady momentum over the past quarters and achieved continued improvement in margins. In the light of the challenging business environment, we will remain vigilant in growing our core businesses and strive for greater improvements in operational efficiency, cost control and financial management. Tiong Woon will continue to maintain its competitive edge by focussing on staff training and labour productivity improvement measures."
