SINGAPORE (Nov 14): Tat Hong Holdings saw its losses for the 2Q18 ended Sept nearly halve to $2.8 million from its reported loss of $5.4 million in 2Q17, mainly due to an improvement in gross profit and share of profit from associates and joint ventures (JVs).
Revenue for the quarter grew 13% to $124.3 million from $109.8 million a year ago, lifted by higher contributions from the Tower Crane Rental, General Equipment Rental and Distribution divisions.
Higher revenue contributions from these divisions were however offset in part by lower Crane Rental revenue due to a lower rental rate in Singapore, lower activity levels in Batam, and the completion of projects in Hong Kong.
Gross profit for the period increased 4% to $35.7 million, translating to a gross profit margin of 29% compared to the 31% registered in 2QFY17.
The group’s total operating costs increased by 4% to $37 million in 2QFY18 due primarily to foreign exchange (forex) losses of $0.9 million compared with a gain of $2.1 million in 2QFY17, as well as the accrual for legal claim of $1.8 million.
Meanwhile, share of results of associates, net of tax, reversed to profits of $0.4 million compared to a loss of $0.5 million a year ago –while share of results of JVs, also net of tax, turned around to profits of $0.1 million compared to a loss of $0.1 million in the previous year.
In its outlook, Tat Hong says it will continue its fleet rationalisation activities, and also continue to take advantage of its strong China presence to explore opportunities in the country’s Belt and Road Initiative.
Last week, the group had announced that Standard Charter’s loss-making private equity unit had made it a buyout offer at 50 cents a share, representing a 28% premium to the year-to-date (YTD) average price of the firm.
See: StanChart unit offers to buy stake in Tat Hong for 50 cts/share
Shares in Tat Hong closed 1.05% lower at 47 cents on Tuesday.
