China property slowdown weighs on Yongmao's Q3

Singapore

THE China property slowdown continued to weigh on cranemaker Yongmao Holdings, which reported a net profit of 7.4 million yuan (S$1.6 million) for its third quarter ended Dec 31, 2014, down 40 per cent from 12.4 million yuan a year ago. Revenue fell 17.5 per cent to 163.8 million yuan, from 198.5 million yuan a year ago.

Yet it was renting out cranes for residential projects in Hong Kong and casino projects in Macau that made money for Yongmao in its latest quarter. Non-controlling interests - essentially the 40 per cent Yongmao does not own in a joint venture renting cranes in Hong Kong and Macau - reported a net profit of 4.9 million yuan, up nine times from 0.5 million yuan a year ago.

Yongmao said its China sales fell 35 per cent for the quarter compared to a year ago, and its Europe sales were down 70 per cent. Yongmao said its domestic market was challenging.

"However, sales in Middle East and Asia (outside the PRC) grew by 90.1 per cent and 13.4 per cent respectively due to higher demand for our products and services especially in Middle East, Macau, Hong Kong, Korea and Myanmar," it said.

For the nine months ended Dec 31, 2014, revenue was down 11 per cent to 613 million yuan from 689 million yuan a year ago. Net profit was up 39 per cent to 56 million yuan from 40 million yuan. Higher net profit included a one-off 12 million yuan gain upon restructuring.

Even as revenue fell, receivables continued to rise, reflecting slower payments by Chinese customers. However, Yongmao's cashflow in the past quarter was aided by it collecting a big sum from amounts owing by related parties.

Yongmao, an associate company of crane supplier Tat Hong Holdings, last traded at 20 Singapore cents a share.