Tat Hong released their FY 2009 results on May 28, 2009. A first glance would show the severity of the impact of the financial crisis, as their 4Q 2009 numbers were much worse year-on-year when compared to their 4Q 2008 ones. Net profit dropped 50% for 4Q 2009 if we compare year on year and revenues fell 40%, but this was hardly surprising given the extent of the financial havoc wrecked by the crisis. These are other aspects will be reviewed in several parts and will be structured as follows: Part 1 will touch on the Profit and Loss, Balance Sheet and Cash Flow Statement. Part 2 will talk about margins for each division and a divisional analysis will be performed (based on Tat Hong’s current five divisions). Part 3 will discuss prospects for the Company and the general economic climate, including the fiscal measures undertaken by the countries in which Tat Hong has a major presence in. Profit and Loss Analysis A revenue decrease was registered for 4Q 2009 of 40% year-on-year at S$110.7 million compared with S$183.7 million. This drop in revenue was mainly due to weakness in the equipment sales division, with sale of cranes dropping sharply by 68% to S$29.7 million as a result of tighter credit from banks and the slowing economy making companies hesitate to spend on capex. Parts and Services and General Equipment Rental also saw dips as the crisis worsened in 4Q 2009, and this will be fully reviewed in Part 2. However, with the change in sales mix, gross margins actually improved to 43% from 37% a year ago. Unfortunately, admin and other operating expenses did not dip in tandem with the drip in revenues and gross profits; hence net profit actually fell 50% from S$30.8 million in 4Q 2009 to S$15.5 million in 4Q 2008. Read more...