Construction crane supplier Tat Hong Holdings today reported a 32 per cent decline in third-quarter net profit to $12.1 million.
Revenue for the three months to Dec 31 slumped by 19 per cent to $167.4 million, as all divisions with the exception of the tower crane rental division turned in weaker performances.
Gross profit fell 24 per cent to $56.3 million, representing a gross profit margin of 33.6 per cent compared with 35.9 per cent achieved a year earlier.
All divisions posted lower margins except the general equipment rental division in Australia where the margin held stable.
In line with a lower level of activities, Tat Hong saw a reduction in distribution expenses from lower staff costs ($900,000) and a decline in other operating expenses from lower staff costs ($1.8 million), lower expenses for the upkeep of machinery, vehicles and buildings ($1 million) and reduced insurance premiums ($600,000).
These were, however, offset by higher administrative expenses ($2.4 million) due to increased staff cost in Singapore, Australia and China, and an increase in net foreign exchange losses of $2.9 million, most of which were unrealised losses due to the depreciation of the Indonesian rupiah against the Singapore dollar and US dollar.
Other operating income posted a 186 per cent increase to $14.9 million, attributable primarily to the $12.9 million gain from the assignation and nomination of purchase rights for a 25-acre plot of industrial land in Iskandar, Malaysia.
The group's share of profits from associates and joint venture fell 8 per cent to $1.1 million as higher contribution from associates were eroded by weaker performance from joint ventures, the latter attributable primarily to the completion of a major project in Papua New Guinea.
A significant decline in net profit contribution from the group's subsidiary in Australia and losses sustained in several of the group's subsidiaries in Indonesia led to a decline of group net profit.
Earnings per share was 1.89 cents while net asset value per share stood at $1.04.
"The slowdown in our single largest market, Australia, continued to widen and deepen," said Tat Hong chief executive and managing director Roland Ng.
"This, together with a volatile currency, high interest rates and a weak commodities sector in Indonesia has hurt our third quarter bottomline," he added.