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PUBLISHED AUGUST 15, 2014
Tat Hong Q1 profit down
BYCAI YONG
caiyong@sph.com.sg
CRANE supplier Tat Hong Holdings reported a 28 per cent fall in net profit, to S$5.96 million from S$8.24 million last year, for its first quarter ended June 30. Revenue fell 6 per cent to S$164 million.
The company managed to reduce operating expenses by 7.6 per cent to S$48.4 million. Earnings per share fell to 0.93 Singapore cent from 1.28 Singapore cents.
Once again, with the exception of tower crane rental, all business divisions reported lower revenues. The distribution division, which makes up nearly two-fifths of Tat Hong's business, contributed a significant portion of the decline. The division saw revenues drop 14 per cent, largely due to falling sales of excavators in Indonesia.
Tower crane rental remains the bright spot as its revenues jumped 21 per cent on the back of China's massive urbanisation efforts. The division, which now makes up 15 per cent of Tat Hong's revenue, looks set to grow further. The Chinese government is increasing its spending on rail infrastructure, while nuclear power plant projects are also resuming, raising demand for tower cranes, said the company. Tat Hong shares rose one cent to close trading at 84.5 cents yesterday.
PROPOSED SPIN-OFF AND LISTING OF PART OR ALL OF THE GROUP’S BUSINESS IN THE PEOPLE’S REPUBLIC OF CHINA
Tat Hong Holdings Ltd (the “Company” and together with its subsidiaries, the “Group”) wishes to announce that the Company is exploring a possible spin-off of part or all of its tower crane rental business in The People’s Republic of China (“Tower Crane Rental business”) via a listing on a reputable Stock Exchange (the “Proposed Listing”).
The Directors believe that the Proposed Listing would, inter alia, provide access to additional source of funding to capitalise on growth opportunities for the capital-intensive Tower Crane Rental business in the People’s Republic of China and at the same time, increase the overall financial capacity and flexibility of the Group to strengthen the growth of its other strategic business units in ASEAN and Australia and unlock shareholder value for the Group. This is consistent with the Group’s approach of reinforcing on its strength and rebalancing its focus and strategies.
The Company will announce any material developments on the Proposed Listing as and when appropriate.
Sale of unit, forex gains lift Tat Hong's Q2 profit
By
Cai Haoxianghaoxiang@sph.com.sg@HaoxiangCaiBT
15 Nov5:50 AM
Singapore
CRANE rental company Tat Hong Holdings reported a net profit of S$11.5 million for its second quarter ended Sept 30, 2014, up 39 per cent from S$8.2 million a year ago.
However, the numbers included gains from the sale of its subsidiary Hup Hin Transport in July. This
Was reading Tat Hong annual report for FY15 and noted something which would like to seek experts' views on.
On Note 6 - Associates:
Fair value of equity interests in Yongmao Holdings Limited : $21,253,000 (page 108)
Carrying value of investment in associate, Yongmao Holdings Limited : $29,046,000 (page 109)
Difference between fair value and carrying value: $7,793,000
Noted the fair value (value of equity interests valued at year end market share price) being less than the carrying value and no impairment being recognised for the year, would the fair value being lower than the carrying value being an indication of impairment?
Noted Tat Hong profit after tax for the year at $6,797,000 and if the carrying value are marked to fair value, an impairment loss of $7,793,000 will be recognised and would turn Tat Hong into loss making for FY15.
23-07-2015, 03:02 PM (This post was last modified: 23-07-2015, 03:04 PM by postage paid.)
It's not wrong according to FRS as under FRS associates are accounted for at their Net Asset Value.
We will have to make a manual adjustment to Tat Hong Balance sheet if we wish to account for Yong Mao at market value.
However for P&L you need to do so consistently over the years or else the full impairment charge will be taken in 1 year when the share price of Yong Mao a phoe have fallen across 2 financial years.
Yes, understand the associate is accounted under FRS 28. However, the fair value is being valued at market share price at year end and as we know the market price are fair value hierarchy level 1 which is the value the market priced each share at considering all contributory factors (efficient market hypothesis). Just wondering if this presents an indication of impairment which the management and auditor had considered.
(23-07-2015, 03:49 PM)butcher Wrote: Yes, understand the associate is accounted under FRS 28. However, the fair value is being valued at market share price at year end and as we know the market price are fair value hierarchy level 1 which is the value the market priced each share at considering all contributory factors (efficient market hypothesis). Just wondering if this presents an indication of impairment which the management and auditor had considered.
Hi butcher,
this issue requires judgement. to me it would be an indication. but to others (e.g. the auditors, mgmt, analysts) it may not. relevant frs is 36 para 12 -14 for such indicators.
it is possible that tat hong is able to argue that it has "significant influence" over the associate and hence the associate is worth more to tat hong than it is to market participants so it does not have to be impaired. (i.e. value in use > carrying value).
this is similar to noble's case. where iceberg is asking why the did not write down yancoal when the discrepancy between book and market value is so big (much bigger than in tat hong case).
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