The firm on Thursday posted a 23 per cent drop in net profit to $68.9 million for its full year ended March 31 on the back of a global economic slowdown that has dampened demand, resulting in lower equipment sales, it said.

Full year revenue remained fairly flat, slipping 1 per cent to $632 million.

The lower net profit was primarily due to a 27 per cent increase in operating expenses, mainly caused by a foreign exchange loss of $16.1 million as the Japanese yen strengthened against the Singapore and Australian dollars.

The firm also registered a $2.8 million valuation loss from hedging contracts in foreign currency, and recorded an impairment loss of $6.4 million as a result of other financial investments.

Excluding these one-off expenses and impairment adjustments, net profit actually increased by 12 per cent, said Tat Hong president and chief executive Roland Ng.

This was supported by a 'good first half' of the year, and also by its tower crane rental business in China, which jumped 178 per cent to $24.7 million.

The firm is planning on expanding into China, which has 'huge potential.. because the crane rental market is not matured yet,' said Mr Ng.

It expects to remain profitable in the 2010 financial year, barring unforseen events, said Mr Ng.