Asia-Pacificâ€™s largest crane company,Â Tat Hong Holdings LimitedÂ (SGX: T03), reported a 14% year-on-year decline in its revenue to S$185.3 million for the second quarter of 2014 (2Q 2014). Tat Hong has four business divisions â€“ Crane Rental, Tower Crane Rental, General Equipment Rental and Distribution â€“and all the business divisions, turned in a poorer performance in terms of revenue, except for the Tower Crane Rental division.
The net profit was at S$8.2 million, a plunge of 53% as compared to 2Q 2013 mainly due toâ€œthe decline in profit contribution from its wholly-owned subsidiaries in Australia as well as from unrealised foreign exchange losses from its operations in Indonesiaâ€.
For the first half of 2014 (1H 2014), revenue was down 16% to S$360.8 million and net profit declined steeply by 52% to S$16.5 million.
As of 30thÂ September 2013, the company sat on a cash balance of S$74.6 million and had a total debt of S$577 million.
For the quarter, the company used S$15.9 million of net cash for operating activities as compared to S$30.1 million used in the previous year. For 1H 2014, S$17.3 million was generated while last year, S$321,000 was used.
An interim dividend of 1.0 Singapore cent per ordinary share has been declared.
Mr Roland Ng, Tat Hongâ€™s Managing Director and Group Chief Executive Officer, said,Â â€œOur results this quarter were impacted by unrealised foreign exchanges losses, most of which arose from inter-company loans and payables in relation to our Indonesian operations. While profit contribution from Australia is still below last yearâ€™s level, it has improved quarter-on-quarter as the cranes which were being relocated in the first quarter started generating income and as cost containment measures yielded results.â€
The shares of Tat Hong closed at S$0.915. It is trading at 8.2 times its historical earnings and has a dividend yield of 4.4%.