Monday, August 27, 2007

Cymao II

If you are invested in a sector, it pays to read how other players are faring. Take the plywood sector. Cymao posted its earnings over the weekend. It wasn't a pretty sight.

Quarterly rpt on consolidated results for the financial period ended 30/6/2007

From the company earnings notes, some serious issues were mentioned.

  1. Sales volume suffered as a result of demand from US has slown down significantly due to overstocking of plywood and drop in the construction activities.
  2. The dumping of plywood products by China into Middle East and South Korea has affected the order book of the Group.
  3. In addition, selling price has fallen by 7% compared to previous year corresponding quarter coupled with higher average log cost bu 19% has further damped the current quarter results registered with a negative gross margin.
  4. Overall, a loss before taxation of rm6.7 million was recorded.

Lower selling prices, price dumping and most of all lack of demand.

Massive issues?

Blogged on Cymao before too, Cymao

Have a look at the same earnings table again.

Let's compare some simple figures.

1. Sales revenue

  • Sales revenue was flat on a Q-Q basis: 48.982 vs 46.621 million.
  • Sales revenue on Y-Y basis showed massive concern: 48.982 vs 72.867 million.

2. Net Earnings.

  • Cymao loss 5.7 million for the quarter. On a q-q basis massive concern cos the last 3 quarters earnings went from a profit of 9.665 mil to 2.464 million to a net loss of 5.7 million.
  • The same period a year ago, Cymao earned 6.15 million

3. Cash Balances.

  • Cash balances dropped to 6.729 million.

4. Borrowings.

  • Total debts increased to 47.341 million.

5. Nett Cash.

  • Cymao is now in a nett debt of 40.621 million. Huge worry because if you look at the quarterly earnings table above, back in 2005 Q1, Cymao showed a nett cash position of 9.376 million. Company's balance sheet has certainly deteriorated for the worse!