Mainboard-listed Tat Hong Holdings (Tat Hong), one of the world’s largest crane company announced its FY08 results ended 31 March 2008. Tat Hong is principally engaged in 4 core activities – rental of cranes, rental of general equipment, sale of cranes and other heavy equipment. With over 30 years of experience in the crane industry, Tat Hong has a combined rental and sales inventory fleet of over 500 mobile crawler cranes spread throughout the region.

NUMBER 1 IN ASIA
Tat Hong serves a wide range of industries ranging from infrastructure to engineering. CEO Roland Ng was recently awarded the 2008 Singapore’s Businessman of the Year. Tat Hong now boasts operations in Singapore, Malaysia, Hong Kong, Thailand, Indonesia, China, Japan, Vietnam, Australia and the Middle East. It was rated number 1 in Asia in terms of aggregate tonnage in the annual survey conducted by UK-based publisher “International Cranes”. Worldwide, Tat Hong ranks number 1 in terms of fleet size of crawler cranes and number 7 in terms of aggregate tonnage.

HIGH RENTAL RATES & UTILISATION
Tat Hong’s FY08 earnings rose 14% on the back of 33% increase in revenue to $639.9m as a result of improved performance across all business divisions. Gross margin climbed to 39%, compared to 30.9% in FY07. This was due to a combination of higher rental rates and continuing high utilisation rates of rental fleets as well as higher selling prices for equipment as a result of supply shortage. Utilisation rate was 80% in average for FY08. Excluding the $32.6m sale of CSC Holdings in FY07, Tat Hong’s earnings would have increased by 93.5% from $46.4m to $89.8m.

Tat Hong’s Australian subsidiary, Tutt Bryant Group, is listed on the Australian Stock Exchange and has acquired several companies including Kingston Industries and Caradel Hire to increase its presence and market share in Australia. Tat Hong also increased its shareholdings in Singapore-listed Yongmao Holdings to 20% to expand its presence in PRC.

CHANGING OLD MACHINERY FOR NEW
Ng commented that Tat Hong is currently renewing its rental fleet by ordering more high tonnage cranes to support the high demand. Old cranes are sold at gains due to the imbalance of supply/demand. The long-term view of Tat Hong is to shift its concentration to bigger capacity cranes from 80-150 to 200-1,000 tonnes and focus more on its rental business. Gross profit contribution from rental operations are expected to exceed 75% of Tat Hong’s total gross profit in 3 years time.

REWARD TO SHAREHOLDERS
Tat Hong announced a one-tier final dividend of $0.038 to reward shareholders for their support. Ng expects the PRC operations to contribute 20% to Tat Hong’s bottom line by 2010, comprising 10% organic growth and the other 10% through M & As. Demand is expected to remain high due to the increasing number of energy plays in Asia, especially PRC and India.