Reporting full year result to 31 March 2010, Singapore-listed Tat Hong said group revenues were down 22% to SGD495.36m, from SGD634.76m in 2009. Gross profit fell by 21%, to SGD190m, from 241m.
Over the last final quarter, however, the company reported revenue growth of 18%, from SGD110.66m to SGD130.86m, and profits up 2% to SGD82.32m, from SGD62.99m.
In the crane rental division, Tat Hong revenues were down by 8% over the year, from SGD179.66m, to SGD165.38m. Over the last quarter, they were up 9%, to SGD42.20m, from SGD38.57m.
Tat Hong said that the decrease over the year was mainly due to lower revenues recorded in the first three quarters. Specifically, the company cited the deferment of key projects in Australia, reduced contributions from Indonesia and Malaysia, and poor market conditions in the Middle East.
This decrease was partly offset, the company said, by the commencement of some deferred projects in Western Australia in the final quarter.
Tat Hong’s 70% owned subsidiary, Tutt Bryant, is listed on the Australian stock exchange. Its full year results give a bit more detail on where the group is seeing glimmers of light in the crane sector. Over the year, Tutt Bryant’s crane hire and heavy haulage revenues were down by 71.2% to AUD82.6m, from SGD99.8m, with net profits before tax down 47.3% to AUD8.7m.
Tutt Bryant attributed the decline to delays in project starts, lack of access to funding, and a general fall in confidence in the market. The company added that, between November and March, there was a considerable reduction in project and haulage activities.
However, the company said it has observed a recent recovery in conditions, and has a degree of confidence that the sector will return to levels of activity equal to those before the global financial crisis, from full year 2011.
Tutt Bryant said the crane hire and heavy haulage sector’s major source of demand continues to be resources and oil and gas. The sector now has a full order book, including some projects that were signed last year and then delayed. These projects are now coming back on line to commence in Tutt Bryant’s 2011 financial year.
One significant project mentioned by the group is the Gorgon Project. Chevron, one of the group’s working on the project, says it is ‘ one of the world’s largest natural gas projects and the largest single resource natural gas project in Australia’s history’. Tutt Bryant says many construction phases association with the project have been awarded, and successful tenderers are now ordering cranes. Tutt Bryant has recently formed a joint venture with Fagioli, called TBF Oceania, which has been shortlisted as one of two potential providers of heavy lift equipment for the project. TBG Oceania has other bids in the sector under way.
Back in Singapore, Tutt Bryant’s parent Tat Hong said it was seeing continuing demand for cranes from the oil and gas sector, and new demand for Land Transport Authority projects, which led to a marginal increase in demand this quarter, compared to Q4 2009.
Tat Hong also saw revenue growth in its much smaller tower crane rental division. Over the full year, the tower crane rental revenues increased by 37% to SGD33.72m; in the fourth quarter, they were up 34% to SGD8.46m. The company said the revenue growth in this sector was due to increased fleet size, high utilisation, and a maiden contribution from its new Chinese tower crane rental subsidiary, Beijing Tat Hong Zhaomao Equipment Rental.
