Tat Hong racks up $17m net loss amid market woes (The Straits Times)

TOUGH market conditions and impairment charges hit crane operator Tat Hong over the past 12 months, it reported yesterday.

It racked up a net loss of $17.1 million, reversing from earnings of $4.2 million, for the fourth quarter while revenue dropped 12 per cent to $137 million for the three months to March 31.

Turnover dived 11 per cent for the full year to $608.6 million with net profit at $4.9 million, 85 per cent down from the $32.8 million reaped a year earlier.

Managing director and chief executive Roland Ng said in a statement that it had been “a challenging year for Tat Hong, made worse by the $30.8 million charge we had to recognise for goodwill and asset impairments for our subsidiaries in Australia in view of the weak market conditions there”.

The firm’s crane rental unit, which accounts for almost 40 per cent of its total revenue, was hit by the building slowdown across the region.

Turnover from this division fell 9 per cent for the year to $237.6 million, although this was partly offset by higher contributions from Malaysia, where the firm participated in more high-value projects and increased barge rental activity.

The tower crane rental sector posted an 8 per cent growth in revenue, which was attributed to the group’s involvement in infrastructure, commercial and power generation projects.

The general rental equipment sector was lacklustre with a 17 per cent slide in revenue due to lower public spending and a lack of infrastructure projects.

Total operating expenditure fell 13 per cent, excluding the impairment charges, because of “cost savings from the disposal of non-core subsidiaries, (as well as) better cost management by Asean and Australian entities in the areas of staff costs and repair and maintenance expenses”, said the company in a statement.

Net asset value per share fell four cents to $1.03, while the loss per share for the quarter was 2.71 cents, from earnings per share of 0.67 cent a year earlier.

Tat Hong shares closed three cents up at 61.5 cents yesterday.

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