3QFY2011 Results Presentation February 14, 2011 Well-Anchored Position Today, we are the: # 1 crane company in Asia, and # 8 in the world, based on aggregate tonne-metres of mobile and crawler fleet 1 # 1 in the world based on number of crawler cranes 1 # 1 in China, and top 5 in the world, based on aggregate tonne-metres of tower crane fleet 1 fleet size of over 1,200 crawler, mobile and tower cranes and still growing Distribution General Equipment Tower Crane Crane 1 Source: International Cranes, IC50 Rankings, June 2010 2 1
Diverse Track Record Construction Engineering Infrastructure Petrochemical Oil & Gas Power Generation Natural Resources 3 Regional Expertise Australia Gorgon Island oil & gas projects Devil s Creek gas plant Pluto LNG project Worsley alumina refinery Cape Preston power stations RGP 5 iron ore projects Apache Transglobal China Dalian Red riverbank nuclear power station Fujian Ningde nuclear power station Jinan West railway station Shenzhen Bao an International Airport Suzhou Future City ASEAN & Others Recently Completed Projects Sentosa IR Marina Sand IR Shell ECC in Pulau Ular Circle Line (MRT) Lucite Alpha 1 in Jurong Island Ongoing Projects Singapore LNG Plant in Jurong Island (end Nov) Lanxess in Jurong Island Marina Bay Front - Garden by the Bay Downtown Line Stage 1 (MRT) Downtown Line Stage 2 (MRT) International Cruise Centre (SG) Central Wan Chai Bypass (HK) Guangzhou Shenzhen Hong Kong Rail Link Kai Tak Development (HK) 4 2
Our Global Reach Europe South Africa Middle East Sri Lanka Maldives Seychelles Mauritius Russia China South Korea Beijing Japan Pakistan Guangzhou Shanghai Myanmar Hong Kong Bangladesh Hanoi India Taiwan Bangkok Vietnam Guam Malaysia Ho Chi Philippines Minh Kuala Lumpur Jakarta Indonesia Singapore Borneo Papua New Guinea Cairns Townsville Port Hedland Dampier Darwin Mackay Dysart Gladstone Australia Brisbane Perth Penrith Coffs Harbour Adelaide Newcastle Kwinana Sydney Geelong Goulburn Portland Melbourne Laverton New Zealand Countries of Tat Hong Activities Tat Hong Offices 5 Fleet Updates 3
Crawler/Mobile Fleet Size (Metric Tonnes) No. of Cranes (as at Dec 31, 2010) No. of Cranes (as at Sep 30, 2010) < 49 MT 103 103 94 50 99 MT 224 216 180 100 149 MT 51 54 54 150 249 MT 98 98 90 > 250 MT 53 54 53 Others 16 18 7 Total Units 545 543 478 Total Tonnage 55,456 55,706 51,156 Group Overall Utilisation Rate (based on tonnage) 60.7% 8% in utilised tonnage 65.7% No. of Cranes (as at Dec 31, 2009) 60.9% 7 Tower Crane Fleet Size (Metric Tonnes) No. of Cranes (as at Dec 31, 2010) No. of Cranes (as at Sep 30, 2010) No. of Cranes (as at Dec 31, 2009) < 99 TM 178 167 90 100 199 TM 166 163 112 200 299 TM 241 230 174 > 300 TM 52 47 20 Others 35 37 4 Total Units 672 644 400 Total Tonnage- Metres Group Overall Utilisation Rate 123,033 118,148 75,602 72.5% 78.6% 77.4% 52% in utilised tonnage 8 4
3QFY2011 Financial Performance Results Summary Revenue improved 12% to S$137.1million in 3QFY2011: All business divisions achieved better results; Tower Crane remained top in revenue growth 62% increase to S$13.7 million Gross profit remained flat: Marginal increase of 1% to S$47.2 million in 3QFY2011; Gross profit margin down 3.6 ppt to 34.4% due to lower margins from all divisions, except General Equipment PATMI declined 60% to S$4.7 million in 3QFY2011: Steep reduction in this quarter s other operating income One-off gain of S$4.3 million from disposal of investment and higher gains from disposal of fixed assets recorded in previous corresponding quarter Higher overheads also arose from expansion costs in China and Australia Balance sheet remained sound as at end December 2010: Net gearing increases to 0.67 times Shareholders equity grows to S$519.7 million Cashflow of S$11.3 million from operational activities in 9MFY2011 10 5
Results at a Glance S$ m 3QFY11 3QFY10 % 9MFY11 9MFY10 % Revenue 137.1 122.8 +12 431.5 364.5 +18 Gross Profit 47.2 46.7 +1 155.5 142.3 +9 Gross Profit Margin (%) 34.4 38.0-3.6ppt 36.0 39.1-3.1ppt PBT 7.1 16.0-56 35.9 44.5-19 PBT (excluding adjustments) 7.4 11.5-36 41.9 38.2 +10 PATMI 4.7 11.6-60 22.1 28.8-23 PATMI Margin (%) 3.4 9.4-6.0ppt 5.1 7.9-2.8ppt 11 Balance Sheet Highlights Fixed Assets (PP&E) As at Dec 31 2010 S$589.1m As at Mar 31 2010 S$520.3m Inventories S$198.6m S$201.0m Debtors S$125.6m S$112.7m Expansion of Crane and Tower Crane fleets Consistent effort to manage inventory levels Improved sales and addition of a new subsidiary in China Cash & Cash Equivalents S$73.5m S$76.6m Shareholders Equity S$519.7m S$498.6m NAV per share (Singapore cents) 91 88 Net gearing 0.67 0.44 Funding for TBG acquisition and Crane and Tower Crane fleet expansion 12 6
Revenue by Business Activity 3QFY2010 3QFY2011 14.3% (S$17.6 m) 6.9% (S$8.5 m) 46.3% (S$56.9 m) 13.9% (S$19.1 m) 10.0% (S$13.7 m) 44.0% (S$60.2 m) 32.5% (S$39.9 m) 32.1% (S$44.1 m) Distribution Crane General Equipment Tower Crane 3Q: Three Months Ended December 31 13 Revenue by Business Activity 15.1% (S$55.1m) 9MFY2010 6.9% (S$25.3m) 44.2% (S$161.0m) 11.7% (S$50.5m) 9MFY2011 10.3% (S$44.4m) 45.2% (S$195.3m) 33.8% (S$123.2m) 32.8% (S$141.4m) Distribution Crane General Equipment Tower Crane 14 7
Segmental Revenue Highlights S$ m 200 161.0 21% 195.3 150 100 50 6% 56.9 60.2 0 3QFY10 3QFY11 Distribution 1 revenue continues upward climb: Improved sales performance in 3QFY11: 9MFY10 9MFY11 Sales recorded to, among others, contractors, an offshore marine company in Singapore and a European crane rental company; Sale of excavators to customers in Indonesia and Vietnam markets also increased Improved sales above were partially offset by lower sales figure from Australian subsidiary, Tutt Bryant Group Government tax investment allowance schemes that contributed to high demand for equipment sales in 3QFY10 ceased in December 2009 1 The Group has combined its reporting for Equipment Sales and Parts & Services under a single segment, Distribution, wef 1QFY11 3Q: Three Months Ended December 31 15 Segmental Revenue Highlights S$ m 150 123.2 15% 141.3 120 90 10% 60 39.9 44.1 30 3QFY10 3QFY11 9MFY10 9MFY11 Crane revenue grew 15% to S$141.3m in 3QFY2011: Improved performance from Australian subsidiary, Tutt Bryant; increased crane deployment to key desalination plants, mining and O&G projects. Hong Kong subsidiary achieved higher revenue; Participation in Express Rail Link, Highway extension projects, Macau casino. Malaysian subsidiary performs better; Crane deployment to major projects e.g. 2 nd Penang Bridge & other offshore projects. Singapore unit remains affected; Off-hire of substantial number of cranes previously deployed in an O&G project 3Q: Three Months Ended December 31 16 8
Segmental Revenue Highlights S$ m 50 75% 44.3 40 30 62% 25.3 20 10 8.5 13.7 0 3QFY10 3QFY11 9MFY10 9MFY11 Tower Crane remained the best performer in revenue growth: Expanded fleet size with contribution from Beijing Tat Hong Zhaomao Equipment and Sichuan Tat Hong Yuen Zheng Machinery Co.,Ltd.; from 400 tower cranes as at end December 2009 to 672 tower cranes as at end December 2010 Utilisation rate remains in seventies range despite a 63% increase in tonnage year-on-year 3Q: Three Months Ended December 31 17 Segmental Revenue Highlights S$ m 60 55.0 8% 50.5 40 9% 20 17.6 19.1 0 3QFY10 3QFY11 9MFY10 9MFY11 General Equipment shows turnaround this quarter: first revenue growth this fiscal year at 9% to S$19.1 million in 3QFY2011 increased demand in the Queensland branches; improvements made to Tutt Bryant s NSW network; and opening of new branches in Victoria and WA possible sustenance of improved performance banking on anticipated increase in demand for construction equipment for Australia s post-flood reconstruction plans 3Q: Three Months Ended December 31 18 9
GP & GP Margin S$ m 200 150 100 50 0 38.0% 39.1% 34.4% 36.0% 142.4 155.5 46.7 47.2 3QFY10 3QFY11 9MFY10 9MFY11 %tage 40% 20% 0% Gross profit improved year-on-year in 3QFY2011 and 9MFY2011 Better revenue performance from all divisions Gross profit margin affected by lower margins across all divisions, except General Equipment : GPM still remains in healthy thirties range 3Q: Three Months Ended December 31 19 Gross Profit by Business Activity 3QFY2010 3QFY2011 16.7% (S$7.8m) 5.4% (S$2.5m) 24.0% (S$11.2m) 18.7% (S$8.8m) 6.3% (S$3.0m) 23.0% (S$10.8m) 53.9% (S$25.2m) 52.0% (S$24.5m) Distribution Crane General Equipment Tower Crane 3Q: Three Months Ended December 31 20 10
Gross Profit by Business Activity 9MFY2010 9MFY2011 16.6% (S$23.6m) 5.7% (S$8.2m) 24.2% (S$34.4m) 16.0% (S$24.9m) 8.5% (S$13.2m) 24.6% (S$38.3m) 53.5% (S$76.1m) 50.9% (S$79.1m) Distribution Crane General Equipment Tower Crane 21 Revenue by Regions 9MFY2010 9MFY2011 7.0% 33.8% 12.0% 30.1% 59.2% 57.9% Australia ASEAN & Others China 22 11
Prospects & Group Outlook Our Key Markets Market Outlook Australia: Infrastructure Spending Requirements Rising (1) Outlook for investment in road infrastructure in Australia shows a fall in spending to A$3.5 billion in 2013 before a rise to S$5.2 billion in 2015 In rail the planned level of spending in Australia continues to rise thanks to both mining and energy-related projects and track upgrades to passenger networks and light rail projects in a number of states Massive flood repair bill (2) Estimates of the bill for the Queensland floods alone run to about A$5 billion for reconstruction, and as high as A$20 billion for broader economic costs to the nation The Queensland Government estimated its repair bill for roads would run to A$1.5 billion Market Outlook China: Lower 2011 infrastructure spending but still in healthy range (3) : Central government investment in infrastructure in 2011 may be up to RMB1 billion less than in 2010, but would still be in the range of RMB30 billion to RMB40 billion Infrastructure development continue to feature strongly in 12 th Five Year Plan (4) : Focus placed on energy efficiency and meeting ambitious carbon reduction targets China s National Nuclear Corporation announced plans to invest close to RMB800 billion into nuclear power over the next decade (1) FNArena News, October 18, 2010 (2) NZ Herald, January 25, 2011 (3) Pacific Epoch, December 15, 2010 (4) Business Monitor International: China Infrastructure Report Q1 2011, December 8, 2010 24 12
Our Key Markets Market Outlook Singapore: Back to moderate growth levels with the completion of major infrastructure projects (1) Industry valued at around US$10bn for 2010 Government is looking to invest in infrastructure to promote productivity growth over the longer term Construction sector is forecast to average growth of 6.8% per annum between 2011 and 2015, bringing the total sector value to S$20.22 billion in 2015 Market Outlook for other markets: Hong Kong (2) : Vietnam (3) : The construction industry value for 2010 is forecasted at US$6.6 billion rising to US$8.38 billion by 2014 Growth will remain strong over the forecast period as industry value will reach US$12.7 billion by 2015 on the back of increasing foreign investment Indonesia (4) : : Strong sectors for investment continued to be the transport, storage and communications industry, which recorded US$941.5mn for 23 projects the mining sector attracted US$711mn for 12 projects Both of these sectors demand supporting infrastructure Papua New Guinea (5)(6) : : It is estimated Papua New Guinea s LNG project will inject more than $20 billion into its economy The country remains under-explored and under-appraised, and the possibility of multi-trillion cubic feet discoveries, which could underpin future LNG projects, remains high (1) Business Monitor International: Singapore Infrastructure Report Q1 2011, December 23, 2010 (2) Business Monitor International: Hong Kong Infrastructure Report Q4 2010, January 6, 2011 (3) Business Monitor International: Vietnam Infrastructure Report Q1 2011, December 10, 2010 (4) Business Monitor International: Indonesia Infrastructure Report Q1 2011, December 3, 2010 (5) ABC News, November 3, 2010 (6) Bloomberg, December 22, 2010 25 Group Outlook The Group expects bumpy recovery path to continue Intensifying competition and market uncertainties remain affects most industry players Australia hit by unusual bad weather, resulting in softening impact on demand, which is expected to continue in the near future Manpower gear-up in Australia in anticipation of heightened demand Arising from possible increase in crane and general equipment rental and sales for post-flood reconstruction plan Tower Crane division in China to focus on cost control Escalating costs in line with expansion strategy in China The Group will prioritise cost management reorganisation for this division Crane should remain stable in next quarter Banking on Australia, Hong Kong and some key markets in SEA Stable performance not sufficient to hold up the Group s overall performance The Group unlikely to perform as well as FY2010, contrary to earlier expectations 26 13
Thank You 14