Written by The Edge
Hiap Tong Corporation, the hydraulic mobile crane specialist, says it posted net profit attributable to shareholders of $3.9 million for the half year ended 30 June 2010 (1H2010).
This represented a 47% decrease in net profit as compared to the corresponding period last year (1H2009: $7.4 million), largely due to a drop in revenue and increase in cost of sales and administrative expenses.
The group’s revenue, which comprised only leasing revenue in both 1H2010 and 1H2009, fell 21.8% year-on-year from $19.4 million to $15.2 million in the current period.
Although the group’s heavy lifting fleet maintained a high utilisation rate in 1H2010, its leasing business witnessed a decline in rental rates amidst an increasingly competitive operating environment as a result of an oversupply of cranes in the market with the completion of major projects, such as the two integrated resorts in Singapore.
There was no trading income recorded in both 1H2010 and 1H2009 as a result of weak demand.
The group’s gross profit correspondingly decreased by 43.8% to $6.0 million in 1H2010, representing a gross profit margin of 39.3%, as a result of higher costs of sales and lower rental rates. The group recorded increased costs of sales in the current period mainly due to higher depreciation expenses from its expanded fleet size. Hiap Tong’s lifting fleet stands at 115 cranes and its haulage fleet at 116 vehicles at 30 June 2010, compared to 115 cranes and 102 vehicles a year ago./
During the period under review, the group also experienced higher salary-related costs and professional fees, and incurred start up costs for its new subsidiary in China, which pushed administrative costs up by 19.2% to $2.2 million. The decrease in net profit, however, was partially offset by an increase in finance income to $1.8 million due to a net positive change in fair value of financial derivatives.
Dividend : None
