Thursday, August 30, 2007

Is PriceWorth really Worth Investing? II

Since PriceWorth just released its earnings, here is an update to the previous posting, Is PriceWorth really Worth Investing?

Let me reproduce the first table posted.



Here is the link to PriceWorth's earnings: Quarterly rpt on consolidated results for the financial period ended 30/6/2007

Total sales revenue for FY 2007 = 546.818 million. ( Historical best)
Total net profit for FY 2007 = 25.223 million. ( Highest ever)

Let's look at the second table posted earlier.



Let's put today's earnings number into perspective.

Total sales revenue for FY 2007 = 546.818 million. ( Historical best)
Total net profit for FY 2007 = 25.223 million. ( Highest ever)

1. Net Profit Margins.

  • So for fy 2007, Priceworth net profit margins will be around 4.6%.
    Slight improvement from fy 2006 which it recorded 4.34%.
2. Cash Balances.

  • Total cash balances is at 9.062 million.
3. Total Borrowings.
  • Total borrowings is now at 250.966 million

4. Nett debts

  • Current nett debt of 241.934 million.

Let's refer back what was written earlier ( Is PriceWorth really Worth Investing? )

Here's the list of my concerns as seen from the data above.

  • Declining net profit margins. Extremely clear margin erosion can be seen each fy since fy 2002. Is this not a concern?
  • Incredible deterioration seen in PriceWorth's balance sheet. Company's nett debt is increasing each single year at an alarming rate.

Let's see.

Point 1.

  • Declining net profit margins. Extremely clear margin erosion can be seen each fy since fy 2002. Is this not a concern?

Its net profit margins came in at 4.6%.

Would this not be a worry considering the fact that this is a GRAND YEAR for the timber sector? Reasoning is if during a GRAND YEAR margins do not improve, what happens next when the good times or economic conditions turn poor or bad for the sector?

Point 2.

  • Incredible deterioration seen in PriceWorth's balance sheet. Company's nett debt is increasing each single year at an alarming rate

Nett debts is now at 241.934 million!!!

How?

2 comments:

ywt06 said...

merdeka! merdeka!

pls do me a favour. may i have ur opinions in epic group berhad?

thank you ...

TOTOMASTER said...

ac-tions (ek-sons) results is out... wat do u think about its results.... margin fell from 30% to 16% to current 13%...

eps is high but still a slow mover... i wonder y....

can we see a RM3 for this fella here? hehehe...