Monday, November 30, 2009

Some Comments On Lion Forest

On Aug 26th it said it made some 28.190 million. Of course if one looks just at these numbers it looked so very impressive for it suggest an incredible earnings per same of some 12.2 sen. And the stock was trading around 1.00.

But one needs to understand how and where these net profits are derived from.

From the company's earnings notes.

  • The Group posted favourable results for the year under review compared to a year ago. Revenue was 57% higher at RM615.3 million, with profit from operations reported at RM52.0 million. The better performance was contributed mainly by the newly acquired Silverstone Berhad.

    After accounting for exceptional gain of RM147.5 million arising from the acquisition of Silverstone Corporation Berhad ("SCB"), the Group reported a significantly higher profit before taxation of RM185.0 million compared to a loss before taxation of RM8.4 million in the preceding year....

    For the quarter, all business segments improved their revenue as compared to last quarter. The Group's revenue improved by 15% to register at RM208.1 million, as improved market sentiment raised demand.

    Profit before taxation was RM32.2 million as compared to RM14.8 million in last quarter, due mainly to further recognition of a negative goodwill of RM14.6 million as a result of fair value adjustment in SCB.

Exception gains distorted Lion Forest bottom line.

Recently, Lion Forest said it made some 32 million.

And again, first impression was that it was impressive.

But in the earning notes, Lion Fib had again some exceptional gains boosting its bottom line.
  • For the quarter under review, a revenue of RM209.4 million was recorded representing approximately 77% increase over last year. The better performance was contributed mainly by the inclusion of Silverstone Berhad's results into the current quarter .

    Correspondingly, profit from operations was higher at RM20.2 million against RM3.2 million last year.

    After accounting for the share of profit from associates of RM21.3 million which arose from the disposal of its investment in China, a profit before taxation of RM39.0 million was recorded.

If you minus out the 21.3 million, the earnings from Lion Forest isn't as impressive anymore.


KENNY BLOG said...

How about the cashholding? LIONFIB holds RM1 plus cash. Compare to curent share price, isn't it is a very attractive stock. According to its past history, it might give the cash payout as capital distribution like in 2008 that was RM2. What your opinion on that, will it likely to happen since other lion companies are short of cash?