Yongmao records 7.4m yuan loss in Q1

TOWERCRANE manufacturer Yongmao Holdings on Monday posted a net loss of 7.4 million yuan (S$1.64 million) for the first quarter FY2016, a reversal of its 36.2 million yuan net profit in the same period a year ago.

The net loss was partly due to lower revenue, gross profit and other income.

It translates to loss per share of 1.68 RMB cents, from an 8.15 RMB cent profit a year ago.

Revenue for the three months ended June 30 plummeted 62.9 per cent to 85.1 million yuan, largely due to a fall in sales in the sluggish Chinese market, which is facing a property slump and general slowdown in investment growth.

"The decline in PRC sales was also partly due to deferred sales of RMB31.2 million in Q1-FY2016 which will only be recognised over three to four years. Asia (excluding China) sales also decreased by 19.6 per cent as the rental revenue contribution from Macau operations was lower following the completion of various casino projects," said the company.

Total operating expenses fell 6.4 per cent to 32.5 million yuan for the quarter, compared to 34.7 million yuan a year ago.

Looking ahead, the company said it faces strong headwinds from the weaker China economy and less than favourable global market conditions.

"With China rebalancing its economy from an investment-driven growth to a consumption-based growth, the investment slowdown has affected key pillars of the economy such as the property and construction market. This has impacted the domestic demand for construction equipment including towercranes in the PRC. Demand for towercranes in other overseas markets is mixed with markets such as Taiwan and Australia likely to see increase in construction activities whereas Europe, Singapore and Macau markets remain challenging."