Ingress Again!

Posted last July, Regarding Ingress Corporation Again, on that Business Times article posted year, it mentioned the following.

• Ingress expects strong revenue growth for the year ending January 2008 on continued sterling showing by its Thai operations in particular.
  
  "We have done well in terms of revenue growth last year and are confident that this will be sustained in the next few years, despite the global downward trend especially in Southeast Asia.
  
  "There's a drop in the Thai domestic market but this is compensated by its exports," Rameli said.
  
  Ingress' revenue soared to RM358.77 million in the year ended January 2007 from RM289.71 million revenue previously. Net profit stood at RM2.3 million in the last financial year.
  
  Ingress gets slightly over 80 per cent of revenue from automotive parts manufacturing, while the balance comes from the PER division. The Malaysian operations contributed 46.5 per cent to Ingress' ACM turnover last year, Thailand's accounted for 51.3 per cent, while Indonesia made up the balance of 2.2 per cent.
  
  This year, company executives still expect a large part of the revenue pie to come from the Thailand operations, given the consistently strong orders from the likes of Honda, Mazda, Ford and Mitsubishi.

This got me thinking.

Why is the article focusing on revenue growth? Revenue soared it shouted.

If revenue has been soaring, why is the net profit only 2.3 million?

It's like despite all the optimism mentioned in the news article, a net profit of only 2.3 million sounds rather dismal.

So I decided to do some checking. Time to check out Ingress earnings report on Bursa website.

Let's look for year ended Jan 2007. Quarterly rpt on consolidated results for the financial period ended 31/1/2007

Ok. Rvenue was at 358 million BUT did you note the whopping loss of 11 million for the financial quarter?

And if you open up the pdf file attached to the earnings, page 16, the company said the following:

• The Group recorded a 32% decrease in revenue in comparison to the immediate preceding quarter. Loss before tax for the quarter amounted to RM11.34 million in comparison to the profit before tax of RM8.59 million in the immediate preceding quarter.
  
  Overall ACM recorded a flat growth in revenue. ACM Malaysia ecorded a 3% decrease in revenue where most models recorded decreases in volume except for Perodua Myvi model.
  
  ACM Thailand registered a 6% increase in revenue where new models recorded increases in volume.
  
  For PER, revenue decreased by 80% due to a major project which was completed in the immediate preceding quarter.
  
  For units under Others, revenue decreased by 89%.

Err... how come? Why did the earnings notes defer so much than what's published in the media?

That was then. Now, on 21st March 2008, Ingress was focused on Business Times again.

• Ingress zooms in on RM1b mark
  
  By Zurinna Raja Adam Published: 2008/03/21
  
  The auto parts maker may boost its overseas revenue to about 60 per cent in three years if talks with Indian and South Korean firms are successful
  
  AUTO parts maker Ingress Corp Bhd aims to triple its revenue to pass RM1 billion mark in as early as two years, backed by rising orders locally and in new markets such as India, its chief said.
  
  The company, which makes parts such as bonnets and door frames for carmakers like Honda, Perodua and Nissan, wants to make more money from markets abroad.
  
  Ingress made a revenue of some RM360 million for the fiscal year ended January 31 2007. About a third of that came from Thailand and Indonesia.
  
  Executive vice-chairman and group chief executive officer Datuk Rameli Musa said Ingress is in talks with Indian and South Korean firms for possible tie-ups.
  
  "We are in talks with them to extend beyond the technical assistance support that we are now providing.
  
  "Currently, Ingress is there on contract basis. We are in talks to partner them in the manufacturing and other divisions," he told Business Times in an interview recently.
  
  If the talks are successful, Ingress may boost its overseas revenue to about 60 per cent in three years, he said.
  
  Ingress, whose single largest shareholder is Rameli, has been in the industry for almost two decades servicing international and local carmakers.
  
  It already has orders worth RM2 billion for the next five years or an average of RM400 million a year.
  
  "Although China and India are providing the cost competitive edge, we will continue to improve ourselves in terms of expanding our product line and emphasis on quality," he added.
  
  Apart from manufacturing, Ingress also has other businesses such as building power sub-stations, putting up transmission lines and the electrification of railway lines.
  
  However, this makes up less than 20 per cent of the group's total revenue and is likely to stay the next few years, Rameli said.
  
  "We want to stay focused in the automotive sector," stressed Rameli.
  
  Ingress has ventured into the retail side recently by opening up a BMW showroom and service centre in Mutiara Damansara, Petaling Jaya, with an investment of about RM100 million.
  
  The group is among three BMW dealers in the country besides Sime Darby Bhd and Sapura Holdings Bhd.
  
  "Depending on how well we do as their dealers, we are interested to expand our partnership with BMW further in the future," Rameli said.
  
  The group made a net loss of RM2.8 million in 2007 and may also make another loss in 2008. It made a bigger loss of RM5.8 million in the nine months to October 31 2007.
  
  The group is due to release its fourth-quarter results this month.
  
  Nevertheless, Rameli expects Ingress to return to profit in 2009 as it expands its product line.

Yet again, the header was rather perhaps misleading.

Focus was the same, on Ingres zooms in on RM 1 Billion mark! WOW!

And yes, towards the end of the article, the article did state that Ingress was losing money and that it expects to return to profit in 2009.

Well, Ingress reported its earnings last night. It reported losses of over 5.1 million for the current quarter, which accumulated losses to over 10 million for the current fiscal year!