With an excellent Track Record of over 30 years,

Transcription

1 3QFY2010 Results Presentation February 12, 2010 Our Competitive Position With an excellent Track Record of over 30 years, Tat Hong is # 1 crane company in the Australasia Region 1 # 2 in the world in terms of quantity of crawler cranes 1 # 6 in the world in terms of number of cranes owned 1 # 7 in the world in terms of aggregate tonnage 1 Combined rental fleet of over 850 crawler, mobile and tower cranes Equipment Sales General Equipment Parts & Services Tower 1 Source: IC50 (Ranking of the world s largest crane-owning companies), International s, June

2 Our Business Long established relationships with major equipment manufacturers in Japan, Europe and USA Serves a diversified range of industries including: Natural Resources Engineering Infrastructure Oil & Gas Power Generation Construction Petrochemical 3 Our Business Exclusive distributorship agreements for cranes and other heavy equipment with: Hitachi-Sumitomo Yanmar Bomag Kato Hitachi (mining equipment) Mustang Kawasaki Mitsubishi Linkbelt 4

3 Our Global Reach Europe Middle East Dubai Pakistan Sri Lanka Maldives Seychelles Russia Bangladesh India China Myanmar Bangkok Malaysia Kuala Lumpur Jakarta South Korea Beijing Shanghai Hong Kong Hanoi Taiwan Indonesia Vietnam Ho Chi Minh Singapore Borneo Japan Philippines Guam Papua New Guinea South Africa Mauritius Karratha Perth Darwin Australia Adelaide Melbourne Mackay Brisbane Newcastle Sydney New Zealand Countries of Tat Hong Activities Tat Hong Offices 5 Australian Operations Darwin Port Hedland Dampier Australian operations managed by ASX-listed Tutt Bryant Group Cairns Townsville Airlie Beach Mackay Dysart Gladstone Brisbane Coffs Harbour Muswellbrook Newcastle Perth Henderson 36 operational locations > 550 staff Penrith Sydney Adelaide Goulburn Portland Geelong Melbourne 6

4 Fleet and Utilisation Updates 7 Group Overall Utilisation and Fleet Profile Crawler & Mobile Fleet Profile Size (Metric Tonnes) No. of s Available (as at Dec 31, 2009) No. of s Available (as at Sep 30, 2009) < 49 MT MT MT MT > 250 MT Others 7 11 Total Units Total Tonnage 51,156 49,401 Group Overall Utilisation Rate (based on tonnage) 60.9% 64.0% 8

5 Tower Utilisation and Fleet Profile Tower Fleet Profile Size (Tonnes-Metres) No. of s Available (as at Dec 31, 2009) No. of s Available (as at Sep 30, 2009) < 99 TM TM TM > 300 TM Others 4 6 Total Units Total Tonnage- Metres Group Overall Utilisation Rate 75,602 66, % 76.7% 9 3QFY2010 Financial Performance 10

6 3QFY2010 Key Financial Highlights 15.9% dip in revenue year-on-year due to subdued demand and prudence in capex decisions Weaker performance from Equipment Sales, General Equipment and divisions Lower contributions from Tutt Bryant, which registered a 13.5% decline in revenue Partially offset by 21% increase in Tower division s revenue and 11% increase in Parts and Services division s revenue Gross profit margin improved marginally to 38% in 3QFY2010 despite declines in revenue and gross profit Due to higher margins achieved in the General Equipment, and Parts and Services divisions. PATMI for the Group increased by 287%: Due to one-off pre-tax gain of S$4.3 million from disposal of equity investment Due to exchange gain of approximately S$771,000 versus a loss of S$21.7m in 3QFY2009. Balance sheet remains healthy: Net gearing at 0.4 times and cash balance at S$86.3 million as at Dec 31, Results Highlights S$ M 3QFY10 3QFY09 % 9MFY10 9MFY09 % Sales (15.9) (30.0) Gross Profit (15.6) (26.4) Gross Profit Margin % pts pts PBT (45.4) PBT Margin % pts (3.4)pts PATMI (47.0) PATMI Margin % pts (2.5)pts 3Q : Three months ended December 31 9M : Nine months ended December 31 12

7 Balance Sheet Highlights Fixed Assets (PP&E) As at Dec 31, 2009 As at Mar 31, 2009 S$480.0m S$385.7m Investment in expanding the group s rental fleet increased PPE by 24% to S$480m Inventories S$195.4m S$217.7m In line with Group strategy to focus on rentals, inventory level was reduced by S$22.3m Debtors S$99.1m S$97.7m Cash & Cash Equivalents Shareholders Equity S$86.5m S$46.3m Proceeds from convertible redeemable preference shares, appreciation of the AUD, proceeds from disposal of investment and repayment of loan by JV resulted in a substantial improvement in cash position S$483.0m S$389.0m Shareholders equity strengthened to S$483m 13 Revenue by Business Activity 3QFY2010 3QFY % 7% (S$14.0 m) (S$8.5 m) 35% (S$43.0 m) 9% (S$12.6 m) 5% (S$7.0 m) 33% (S$48.9 m) 14% (S$17.6 m) 33% (S$39.9 m) 20% (S$28.9 m) 33% (S$48.8 m) Equipment Sales General Equipment Parts and Services Tower 3Q: Three Months Ended December 31 14

8 Revenue by Business Activity 9MFY2010 9MFY % 7% (S$40.3 m) (S$25.3 m) 33% (S$120.7 m) 8% (S$39.6 m) 3% (S$18.4 m) 43% (S$224.8 m) 15% (S$55.0 m) 34% (S$123.2 m) 19% (S$97.2 m) 27% (S$141.1 m) Equipment Sales General Equipment Parts and Services Tower 9M: Nine Months Ended December Segmental Revenue Highlights S$ million S$ million Equipment Sales Q09 3Q % % 3Q09 3Q10 3Q: Three Months Ended December 31 Equipment Sales revenue declined 12%, due mainly to: Continued underperformance of equipment sales in Australia. Significant drop in sales to end users and traders in the region Partially offset from increased sales in Malaysia and Vietnam. revenue declined 18%, due mainly to: Decrease in rental revenue from Australia, Middle East and Malaysia Completion of projects in Indonesia and Malaysia Lower level of activities and deferment of projects in the oil & gas, resource and construction industry across Australia and reduced spending in the power generation maintenance projects for Bradshaw Heavy Haulage Poor market conditions in Middle East Partially offset by revenue increase in Singapore (mainly due to participation in oil and gas and infrastructure projects) 16

9 Segmental Revenue Highlights General Equipment S$ million % Q09 3Q10 Parts and Services General Equipment revenue declined 39%, due mainly to: Lower contribution from Kingston Industries rail maintenance contracts Discontinuation of the waste management and heavy haulage division of New South Wales in 4QFY2009 Reduced general equipment hiring activities in Queensland and New South Wales due to the wet season S$ million % 14.0 Parts and Services revenue increased 11%, due mainly to: Increased spare parts sales and provision of steel fabrication services in Indonesia 0 3Q09 3Q10 3Q: Three Months Ended December Segmental Revenue Highlights Tower S$ million Q09 21% 8.5 3Q10 Tower revenue grew by 21%: In line with increased rental fleet size and stable utilisation rate 3Q: Three Months Ended December 31 18

10 Gross Profit by Business Activity 3QFY2010 3QFY % (S$8.5 m) 5% (S$2.5 m) 6% (S$2.7 m) 13% (S$7.1 m) 4% (S$2.4 m) 12% (S$6.6 m) 17% (S$7.8 m) 54% (S$25.2 m) 20% (S$10.8m) 51% (S$28.5 m) Equipment Sales General Equipment Parts and Services Tower 3Q: Three Months Ended December Gross Profit by Business Activity 9MFY2010 9MFY % (S$22.3 m) 6% (S$8.2 m) 8% (S$12.1 m) 12% (S$23.7 m) 3% (S$6.6 m) 20% (S$39.3 m) 17% (S$23.6 m) 53% (S$76.1 m) 19% (S$37.0 m) 45% (S$86.9 m) Equipment Sales General Equipment Parts and Services Tower 9M: Nine Months Ended December 31 20

11 Gross Profit & Gross Profit Margin S$ million % 38.0% 40.0% % % 20.0% % 0.0 3QFY09 Gross Profit 3QFY10 Gross Profit Margins 3QFY10 Gross Profit Margin improves marginally to 38.0% despite 15.6% dip in Gross Profit, due to: 0.0% Higher margins achieved by segment due to higher utilisation of larger capacity cranes (5 units vs. 2 units in 3QFY09) Higher margins achieved by Parts and Services segment for the provision of services for a steel fabrication job in Batam. Higher margins achieved by General Equipment due to change in rental mix: more higher-margin dry hire rental less usage of third parties rental equipment 21 Prospects & Market Outlook Macroeconomic outlook (1) : world output expected to rise by 4%, supported by extraordinary stimulus - ASEAN, which accounts for 35% of the Group s revenue, is expected to grow significantly faster than the developed economies (6% vs. 2%) Market Outlook - Australia (2) : - Australia, which accounts for 57% of the Group s revenue, is showing stronger economic conditions than expected - Demand boosted by public infrastructure spending and an upturn in housing construction - Investment in the resources sector is strong - Stable outlook for oil and gas sector, with significant investment and continued developments in major projects (3) - (1) World Economic Outlook - Update, Jan 26, 2010 (2) Statement by Glenn Stevens, Governor, Reserve Bank of Australia, February 2, 2010 (3) Australian Oil & Gas 2010 Outlook : Too much of a good thing Fitch Ratings, Feb 8,

12 Prospects & Market Outlook Market Outlook - Singapore (1) : - The Singapore government is expected to award between S$21-27 billion of construction contracts in 2010 and between $18-25 billion per year for Singapore could see a strong economic rebound with a GDP growth of between 7% 7.8% (2) - Positive Asian offshore market with higher spending in exploration and production activities by national oil companies (3) Market Outlook China: - China GDP set to grow 9.5% in 2010, led by growing real estate investment and rising consumption (4) - China to lead the way in infrastructure spending (5) : - China currently spends about 9% of its GDP on infrastructure, versus 5% in Europe and 2.4% in the United States. Over the next 10 years, China will spendus$200 billion on infrastructure development alone (1) Business Times, Jan 14, 2010 (2) Business Times, Jan 29, 2010 (3) Asia offshore and yards DnB Nor Markets, Feb 1, 2010 (4) Development Research Center of the State Council, People s Republic of China, Jan 26, 2010 (5) CIBC World Markets Research, January 26, Group Outlook Statement The global financial crisis and the uncertain economic outlook have affected the Group s YTD financial performance in FY2010. The Group expects the Equipment Sales & General Equipment division s performance to continue to be weak as customers remain cautious on their capital investment decisions and rental commitments. Performance for the other divisions are also expected to be relatively more stable with the help of the stimulus packages released by the respective governments in some of the key markets which the Group is currently operating. The Group s 70%-held ASX-listed subsidiary, Tutt Bryant Group Limited, disclosed that the demand for their products and services is expected to increase on the back of major resource and infrastructure projects in FY2011. Barring any unforeseen circumstances, the Group expects to remain profitable in FY

13 Strategies & Plans 25 Future Strategies and Plans Continue to establish Tat Hong as a Company Gross Profit contribution from rental operations to maintain at 75% of Group s total GP Extend the lead and become the dominant tower crane rental group in China through M&A and organic growth Maintain trading stock at an optimum balance In line with strategy to trim inventory and focus on rental Prudent capital and risk management strategies with focus on inventory management 26