Equipment sales was the company’s only business segment to see a decline in revenue during the three months to December 31, 2008, with tower crane rental growing 158%, to SGD7m ($4.6m), crane rental up 15% to SGD48.8m ($32.3m), parts and services up 9% to SGD12.6m ($8.3m) and general equipment rental up 1% to SGD28.9m ($19.1m).
The huge growth attributed to Tat Hong’s tower crane rentals was down to the segment being newly formed in the previous financial year and expansion of the tower crane fleet commencing in the current financial year.
The 33% drop in its equipment sales division’s revenue during the period, down to SGD48.9m, contributed to an overall fall of 7% in the company’s revenues to SGD146m. Gross profit in the third quarter was down 10%, with profit before income tax dropping 87% from SGD33.8m to SGD4.4m. Overall profit was down 86% to SGD3.3m.
For the nine months to December 31, 2008, revenue was up 14%, gross profit up 10%, profit before income tax down 14% and overall profit down 13%.
“As a result of the weakening economy, prudence in capital investments and the tightening of credit by most banks have affected our equipment sales business,” said president and group chief executive officer Roland Ng.
“Going forward, the group will remain prudent through capital and risk management strategies, and continue to focus on the rental business for long-term growth.”
