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Crane supplier Tat Hong's Q2 net loss narrows to 48% from improved performance Down Under
MAINBOARD-LISTED crane supplier Tat Hong Holdings stayed in the red in the second quarter, but its losses were halved on the back of improved performance in its Australian operations.
It announced on Tuesday that its net loss for the three months to Sept 30 was S$2.79 million, a 48 per cent drop from the S$5.413 million in the same period the year before.
The company's results got a boost from a 13 per cent rise in revenue to S$124.265 million, as turnover improved in all business segments save for the crane rental division.
Loss per share narrowed to 0.37 Singapore cent, from 0.86 Singapore cent previously.
The results came as crane rental revenue dropped by 6 per cent on the previous year, to S$32.034 million, owing to a lower rental rate in Singapore as well as lower business activity in Batam and the completion of projects in Hong Kong.
But this was partly offset by higher crane utilisation rates in Malaysia and Australia.
Revenue from general equipment rental in Australia also jumped by 34 per cent to S$14.635 million, with the utilisation rate up and new projects starting amid a growth in infrastructure expenditure.
Higher equipment and parts sales in Australia helped to drive up turnover for the distribution division as well, even as demand softened in other overseas markets such as Thailand and Vietnam.
Distribution revenue rose 25 per cent to S$49.412 million.
Meanwhile, the tower crane rental business in China contributed S$28.184 million in revenue, a gain of 11 per cent on the previous year.
Tat Hong noted in its report that the group's overall performance could be hit by "challenging market conditions in certain parts of the Asean region", as well as newly announced environmental regulations in the area around Beijing in China.
But it also expects "steady growth" of its tower crane rental business in China and "an improvement" in its Australian operations, it said.
Tat Hong added: "Notwithstanding the above, the group will continue its fleet rationalisation activities.
"The group will also continue to take advantage of its strong China presence to explore opportunities in China's Belt and Road Initiative."
Tat Hong on Nov 10 confirmed that it had received a non-binding letter from Standard Chartered Private Equity Singapore (SCPE) that proposed to acquire a stake in the crane company for S$0.50 a share.
Its shares closed lower by S$0.005, or 1.053 per cent, to S$0.47, before results were announced.