Tat Hong Holdings Limited - MANAGEMENT REPLY: Still time for tower crane rental business to contribute significantly.

27/3/2013 – Tat Hong believes that its tower crane rental business is a relatively new business when compared to its other core businesses.

Therefore, it may take some time before rental business to contribute significantly.

The company was responding to our questions in our earlier report titled "What acquisitions are in the pipeline?" (March 26).

Meanwhile, the group did not provide the expected utilisation rates for crawler and mobile cranes.

We thank management for its response.

Question

Investor Central. We asked these questions that needed to be asked (reproduced here along with the answers from the company):

1. What acquisitions are in the pipeline?

Reply: In the normal course of doing business, management explores all opportunities, including strategic acquisitions, to expand its business. In compliance with the SGX-ST Listing Manual, an announcement would be made via the SGXNET should there be any material developments.

2. Can we expect higher utilization in Q4?

Reply: The reported utilisation rates for our crawler and mobile cranes are spot rates as at the date of the report. Our utilisation rates are reported at the end of every quarter in our results presentation pack. As many factors affect the utilisation rates, these rates fluctuate from time to time. Thus, a guidance on the future expected utilisation rates may not be meaningful.

3. Is tower crane rental expected to be a major contributor to revenue in the future?

Reply: The Tower Crane rental business is a relatively new business in the context of the Group’s business history. Whilst it is the Group’s intention to grow this business, it must be noted that the Tower Crane rental now contributes about 9% of total Group revenue and thus, it may take some time before its contribution reaches the size of the Group’s other core businesses.

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