Tat Hong announced Q1 2010 revenues for the three months to 30 June 2009 of SGD120.09m, down 37% from SGD191.33m in the quarter to 30 June 2008. Gross margins increased slightly, to 39.4% this year, from 36.8% last year, as revenues were increasingly derived from higher margin segments. Cost of sales fell 40% to SGD72.80m, from SGD120.87m in the comparable period. Gross profit fell by a third, from SGD70.46m to SGD47.28m.
Results by segment were highly varied. Equipment sales, the biggest earner last year, with revenues of SGD92.90m, fell 60% to SGD36.92m this year. General equipment rental also showed marked declines, down 47% to SGD19.33m from SGD36.15m.
Crane rental was more resilient: revenues in this segment only slipped 2%, to SGD42.78m, from SGD43.58m last year. The company said crane rental revenues in Singapore, Australia and Malaysia increased by around 10%, driven by oil and gas projects, transport infrastructure projects in Singapore, and a wharf and bridge expansion programme in Australia. Indonesian crane rental revenues declined by 36%, as oil and gas projects contracted in fiscal 2009 came to an end.
The company’s new tower crane rental division increased revenues by 49%, to SGD7.94m, as Tat Hong increased the size of its tower crane fleet.
The company has acted to cut operating expenses. Total operating expenses fell by 10%, year-on-year, to SGD28.6m. Distribution costs declined SGD1m in line with lower sales; administrative costs fell by SGD805,000 as the company carried out fewer corporate exercises and incurred fewer professional fees. Staff costs were down by SGD2.3m, in line with planned cost cutting measures. Maintenance costs were SGD670,000 lower than last year, when a batch of Australian equipment had required inspection. However, the strengthening Japanese and Australian currencies meant that exchange gains fell from SGD4.1m to SGD2.4m.
Net profit after tax and minority interest fell by 64% to SGD10.6m.
