A Quick Review Of Uchi's Earnings

Time to give out credit. :D

First Uchi Tec.

The last posting I made on Uchi Tec was in Aug 2009: A Quick Look At Uchi's Earnings.

Uchi announced its earnings last night.


As can be seen from the table above, as again, the broader picture still does not look good for the earning still pales in comparison with what Uchi did last fiscal year.

However, when you compared it what Uchi did last quarter, the sign of the turnaround is there. (you can see the second quarter screen shot here and the first quarter screen shot here )

Some notes from the company:

• 14. PERFORMANCE REVIEW
  
  Revenue in Ringgit Malaysia for the period ended September 30, 2009 (RM62.862 million which equivalent to USD17.753 million), decreased by 35% as compared to September 30, 2008 (RM97.078 million which equivalent to USD29.829 million), mainly due to lower sales volume in consequence of customer’s logistic planning restructuring and unfavourable global economic condition.
  
  15. COMPARISON WITH THE IMMEDIATE PRECEDING QUARTER’S RESULTS
  
  There was no significant change in operating profit as compared to the immediate preceding quarter ended June 30, 2009.
  
  Profit before taxation for the current quarter increased by 89% because profit before taxation for the six months period ended June 30, 2009 was affected by the recognition of realized foreign exchange losses of RM8.9million upon termination of certain open contract with a bank.
  
  The recognition of such exchange losses shall not recur in the subsequent period of the year.

One more note. The dividend issue. Back in Feb 2009, I wrote Would You Buy Uchi For Its Dividends? (Uchi then was 75 sen)

The last few lines of the posting:

• 3. Cash balances is also clearly declining and one of the main reason is that Uchi's pays great dividends.
  
  Now common sense would suggest that if the earnings keep on declining, one day Uchi's dividends payout would surely decline too.
  
  Counter argument is that in the long run, Uchi's earnings should recover and given the fact that Uchi's current cash balances is still quite sizeable, why worry? Buy and enjoy the dividends for the long term.
  
  How?
  
  Would you buy Uchi for its dividends?

Have a look at this screen shot from Uchi's earnings notes.

And as usual... how?

Oh.. this again is not a tipsy. Please lah. The only way I know how to make anyone tipsy is to whip out my bottle of whisky or perhaps a bottle of wine. :)

So if you like to ass-u-me, go ahead, your ass not mine. :D

The Very Best

George Best 22 May 1946-25 Nov 2005

RIP

Maradona good.

Pele better.

George Best

Boustead Net Profit Up Or Down?

On Business Times:

• Boustead Q3 net profit up 72pc
  
  Published: 2009/11/25
  
  BOUSTEAD Holdings Bhd (2771) yesterday reported a net profit of RM108 million for its third quarter, 72 per cent bettter than the RM63 million profit recorded in the preceding quarter.
  
  The strong result was achieved on a turnover of RM1.4 billion.
  
  For the nine month period, Boustead registered a net profit of RM239 million on the back of a RM3.9 billion turnover.
  
  Earnings per share was 29.1 sen while net assets per share was lower at RM4.08 due to the dilutive effect from the recently concluded rights issue.
  The Boustead board has declared a third interim dividend of 7.5 sen which brings dividend for the 2009 financial year to 17.5 sen or 35 per cent.
  
  "Given our third quarter results, clearly the tide and sentiments are turning by virtue of the fact that our earnings are up. The sectors of the economy we are involved in, namely the consumer and the heavy industries segments bode well for the group while our plantations continue to be a steady revenue generator and profit contributor," Boustead group managing director Tan Sri Lodin Wok Kamaruddin said in a statement.
  
  He said Boustead's balance sheet appears strong, following its recent rights issue which generated proceeds in excess of RM700 million while its gearing ratio has dropped significantly to 0.8 times from 1.2 times.
  
  During the quarter under review, Boustead's heavy industries division emerged as the main contributor, with a profit of RM49 million.
  
  The plantation division recorded a profit of RM17 million compared with RM10 million achieved in the preceding quarter while Boustead's property division recorded a 15 per cent decline in profit to RM19 million.
  
  The finance and investment division achieved a profit of RM20 million compared with RM6 million achieved in the preceding quarter while its trading division registered a profit of RM14 million against RM4 million recorded in the preceding quarter
  

Here is the screen shot of the article.

This is the Edge Financial Daily version. Boustead’s 3Q profit down 47% y-o-y

• Boustead’s 3Q profit down 47% y-o-y
  Written by Isabelle Francis
  Tuesday, 24 November 2009 10:28
  
  KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] posted a net profit of RM86.2 million in the third quarter (3Q) ended Sept 30, 2009, down 47% from RM164 million a year earlier but up 84% from the preceding quarter’s earnings of RM63 million.
  
  Revenue dropped 27% year-on-year (y-o-y) to RM1.42 billion from RM1.95 billion but was up 11% from the preceding quarter. Basic earnings per share (EPS) fell to 12.41 sen from 25.48 sen a year earlier.
  
  It declared a third interim dividend of 7.5 sen per share less tax, bringing the total to 17.5 sen or 35% per share less tax for the current financial year ending Dec 31, 2009. The latest dividend is payable on Dec 29, 2009.
  
  For the nine-month period, net profit fell 59% to RM193.92 million from RM468.2 million a year earlier, while revenue dipped 33% to RM3.91 billion from RM5.8 billion.
  
  EPS fell to 16.55 sen from 48.36 sen, partly due to the dilutive effect of a rights issue.
  
  “Clearly the tide and sentiments are turning by virtue of the fact that our earnings are up (quarter-on-quarter). The sectors of the economy we are involved in, namely the consumer and the heavy industries segments bode well for the group while our PLANTATION []s continue to be a steady revenue generator and profit contributor.
  
  “Our balance sheet looks strong given our recent rights issue which generated proceeds in excess of RM700 million. Our paid-up capital has increased to RM456 million and our gearing ratio has dropped significantly to 0.8 from 1.2 times. In essence, our financial strength is strong while our prospects look better,” said group managing director Tan Sri Lodin Wok Kamaruddin in a statement yesterday.
  
  Boustead told Bursa Malaysia yesterday its highest profit earner — the heavy industries division — contributed a pre-tax profit of RM113 million for the nine-month period versus RM233.1 million a year earlier due to slower progress of work and cost escalation.
  
  Its second-largest profit contributor, the plantation division, contributed a pre-tax profit of RM50.7 million versus RM260.8 million.
  
  Boustead said the division achieved an average palm oil price of RM2,172 per tonne versus RM3,103 per tonne previously. Fresh fruit bunch harvest totalling 827,850 tonnes was 5% lower than last year.
  
  It said its property division’s pre-tax profit of RM58.9 million for the period was 44% lower than last year’s. Profit from its hotel operation was lower due to the start-up cost of the recently opened Royale Chulan Hotel. It added that the property development segment profit was also lower, due to the absence of corporate lot sales.
  Boustead said its finance and investment division reported an improved pre-tax profit of RM29.6 million.
  
  It noted that BH Insurance posted a 62% higher pre-tax profit of RM24.5 million, mainly due to the increase in underwriting and investment income.
  
  Meanwhile, it said the Affin Group posted a better pre-tax profit of RM383.2 million versus RM288.6 million a year earlier, due to improved net interest and Islamic banking income, while loan provisions were also lower.
  
  Boustead said the trading division, meanwhile, posted a lower profit of RM21.5 million. The division gained profits from its petroleum retail unit Boustead Petroleum Marketing Sdn Bhd (BHPetrol), and from the LCCT Baggage Handling system project.
  
  On its outlook, Boustead said its most lucrative business, the heavy industries division, will continue with its effort in developing its defence and commercial businesses. It will also establish more partnerships.
  
  The company is cautiously optimistic that CPO prices could sustain at the RM2,200 to RM2,400 level till year-end on the back of steady overseas demand as economies around the world recover.
  
  It said a factor that bodes well for the CPO price would be the potential for further weaknesses in the US dollar.
  
  It added that the property division’s earnings would be driven by the ongoing developments at Mutiara Damansara and Mutiara Rini townships and the division’s stable of commercial and retail PROPERTIES [].
  
  The company said that the expansion of the hotel activities, which now include the five-star Royale Chulan Hotel and Royale Bintang Seremban are expected to further increase revenue for the hotel division.
  
  
  
  This article appeared in The Edge Financial Daily, November 24, 2009.

And I would bet that the mak cik at the canteen would say 'Aiseh macam mana ni?'

Me?

I think the below table says it all!

Tanjung Offshore Suffers Huge Losses 'As Expected'

Oh yeah, good old OSK.

The other day I was reading their report on Tanjung Offshore. It interested me for a couple of reasons. Firstly OSK warns of lower earnings, ie losses from Tanjung Offshore! Secondly it lowered its target for Tanjung. Now lowering price target is understandable but when the Target Price is reduced from 1.94 to 0.88 sen, one just have to wonder what's happening!

This was their explanation.

• We expect Tanjung Offshore to announce its 3QFY09 results on 24 Nov 2009, which we gather would be in the red. This may be mainly attributed to its UK subsidiary, Citech, experiencing some cost overruns and late delivery issues. Hence, we are lowering our FY09-10 earnings, as well as downgrading our call to Sell, with a target price of RM0.88 (previously Buy, TP: RM1.94)
  
  3QFY09 results likely to be bad. Tanjung Offshore is expected to announce its 3QFY09 results on 24 Nov, 2009, which we understand would be in the red compared to a net profit of RM2.8m in 2QFY09 and RM10.0m in 1QFY09. We gather that the main reason for the weak results emanate from its UK subsidiary, Citech Energy Recovery Systems UK Ltd, which manufactures CITECH waste heat recovery units. Apparently, this unit again experienced cost overruns and late delivery like it did during 2QFY09, when its net profit plunged 72.5% q-o-q. We also see this loss spilling over to 4QFY09, which may erode its cumulative 1H09 profits.
  
  

Yeah, previously 1.94!

But OSK wasn't the only that had a SELL on the stock.

On 26th Aug 2009 AmResearch downgrades Tanjung Offshore to Sell (AmResearch gave it a fair value of 1.11) and Maybank Investment Research too had a SELL on the stock with a target price of 0.90.

Now OSK too had a report on 26th Aug. This is what they wrote!

Their price target was 1.74! LOL! (Remember AmResearch had it at 1.11 and Maybank had it at 0.90)

I guess their downgrade on 20th November was better late than never!

Tanjung Offshore announced its earnings last night. It made huge losses!

I then looked at its Balance Sheet.




Compared to previous year, cash balance down. Receivables are rather high at 196 million. But the look at the spiralling debts! Look at all the bonds and the Islamic notes. Total debts now stands at 578.194 million! (Are you sure debts is good?)

How?

LOL! Some would say no worries. The losses are 'as expected' and that the recent decline in Tanjung Offshore share prices HAD already reflected these losses.

So how?

On the Edge Financial Daily. Tanjong Offshore posts RM10m net loss in 3Q

• Tanjong Offshore posts RM10m net loss in 3Q
  Written by Siti Sakinah Abdul Latif
  Tuesday, 24 November 2009 23:48
  
  KUALA LUMPUR: Tanjong Offshore Bhd posted a net loss of RM10.28 million in its third quarter (3Q) ended Sept 30, compared with a net profit of RM5.08 million a year earlier, due mainly to the loss at its UK unit Citech Energy Recovery Systems UK Ltd (CERS).
  
  The company said CERS registered a net loss of £2.70 million (RM15.1 million) in the quarter and had ongoing late delivery charges payments and escalation of costs in its manufacture of waste heat recovery packages.
  
  Revenue for the quarter fell 21.3% to RM154.88 million from RM196.91 million. Loss per share stood at 4.18 sen, compared with earnings of 2.49 sen previously.
  
  "Recently, the group reshuffled the top management positions at CERS so as to have more direct involvement in the day-to-day operational matters. Moving forward, we hope to turn around the losses at CERS and register new sales for the financial year ending 2010," it said in the statement.
  
  For the nine months to September, net profit plunged 86.6% to RM2.46 million from RM18.35 million in the corresponding period of FY08, while revenue jumped 38.3% to RM513.4 million from RM371.13 million.
  
  The company said that it remained "cautiously optimistic" on prospects of the oil and gas industry in the international market .
  
  It said despite the losses registered in 3Q "we remain confident that we are able to overcome short-term losses" as the company continuously enhanced its services to the oil majors in Malaysia and overseas market

One In Four Borrowers Under Water

On WSJ: One in Four Borrowers Is Under Water

• By RUTH SIMON and JAMES R. HAGERTY
  The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.
  
  Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.
  
  These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn't expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.
  
  Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home's value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.
  
  Most U.S. homeowners still have some equity, and nearly 24 million owner-occupied homes don't have any mortgage, according to the Census Bureau.
  
  But negative equity "is an outstanding risk hanging over the mortgage market," said Mark Fleming, chief economist of First American Core Logic. "It lowers homeowners' mobility because they can't sell, even if they want to move to get a new job." Borrowers who owe more than 120% of their home's value, he said, were more likely to default.
  
  Mortgage troubles are not limited to the unemployed. About 588,000 borrowers defaulted on mortgages last year even though they could afford to pay -- more than double the number in 2007, according to a study by Experian and consulting firm Oliver Wyman. "The American consumer has had a long-held taboo against walking away from the home, and this crisis seems to be eroding that," the study said.
  
  Just months after showing signs of leveling off, the housing market has thrown off conflicting signals in recent weeks. Jittery home builders and bad weather led to a 10.6% drop in new home starts in October, and applications for home-purchase mortgages have dropped sharply in recent weeks.
  
  These same falling prices have boosted home sales from the depressed levels of last year. The National Association of Realtors reported Monday that sales of previously occupied homes in October jumped 10.1% from September to a seasonally adjusted annual rate of 6.1 million, the highest since February 2007.
  
  The bump in sales was ahead of forecasts, spurred by falling prices, low mortgage rates and a federal tax credits for buyers. Congress recently expanded and extended the tax credits.
  
  The latest First American data aren't comparable to previous estimates because the company revised its methodology. First American now accounts for payments made by homeowners that reduce principal, and it no longer assumes that home-equity lines of credit have been completely drawn down.
  
  The changes reduced the total number of borrowers under water -- although both old and new methodology show increases from the previous quarter. Using the old methodology, the portion of underwater borrowers would have increased to 33.8% in the third quarter
  
  Homeowners in Nevada, Arizona, Florida and California are more likely to be deeply under water, according to the analysis. In Nevada, for example, nearly 30% of borrowers owe 50% or more on their mortgage than their home is worth, said First American.
  
  More than 40% of borrowers who took out a mortgage in 2006 -- when home prices peaked -- are under water. Prices have dropped so much in some parts of the U.S. that some borrowers who took out loans more than five years ago owe more than their home's value.
  
  Even recent bargain hunters have been hit: 11% of borrowers who took out mortgages in 2009 already owe more than their home's value.
  
  Andrew Lunsford put 20% down when he bought his home in Las Vegas for $530,000 in 2004. Now, he said, his home was worth less than $300,000.
  
  "I'm to the point where I feel I will never get my head above water," said Mr. Lunsford, a retired state trooper who works for an insurance company. He said his bank won't modify his loan because he can afford his payments, and he's unwilling to walk away, he said: "We're too honest."
  
  Borrowers with negative equity are more likely to default if they live in a state where the bank can't pursue their assets in court, according to a study by the Federal Reserve Bank of Richmond.
  
  But borrowers who are less than 20% under water are likely to maintain their mortgage if their loan is modified and the payments reduced, said Sanjiv Das, head of Citigroup's mortgage unit. "Beyond 120%, the most effective modification is a complete loan restructuring, including a principal reduction."
  
  Mortgage companies have been reluctant to reduce mortgage principal over worries about "moral contagion, with people not paying their mortgage or redefaulting because they believed the bank would reduce their principal," Mr. Das said.
  
  Many borrowers are so deeply under water that they can't take advantage of lower rates and refinance their mortgage. "We're declining hundreds of loans each month," said Steve Walsh, a mortgage broker in Scottsdale, Ariz. "The only way we will make headway is if we allow for a streamlined refinance where the appraisal is irrelevant."
  
  Realtors reported that home sales in October were up 24% from a year earlier. The number of homes listed for sale nationwide was 3.57 million at the end of October, down 3.7% from a month earlier, the trade group said. But that inventory could rebound next year as banks acquire more homes through foreclosure.
  
  About 7.5 million households were 30 days or more behind on their mortgage payments or in foreclosure at the end of September, according to the Mortgage Bankers Association. Many of those homes will be lost to foreclosure, adding to the supply of homes for sale.
  
  A recovery could pay off for the roughly 30% of underwater borrowers who owe 110% or less of their home's value and are able to endure the slump. "Most people prefer to stay in their home" even if the value of their property has declined, said John Burns, a real-estate consultant based in Irvine, Calif.
  
  —Nick Timiraos contributed to this article.
  

What Is Mega First Doing?

I had posted some postings on companies dabbling in the share market.

1. Regarding CSC Steel'sCurrent Earnings And Its Investments In Marketable Securities
2. Apollo Food's'Investments' In The Share Market
3. Listed Companies Investments: Yung Kong Galvanised Steel
4. Maybulk Had 'Investment' Losses Of Over 62 Million!
5. Why Is Maybulk So Active In the Share Market?
6. Again On Yung Kong Galvanised Steel's Quoted Investments
7. A Look At How Apollo Food Holdings Dabble In The Share Market

I was just reading Mega First earnings just now.

I then looked at what the company said in its notes.

WOW! Look at the amount of money Mega First made from the gain of disposal of quoted investments!

I then looked at the cash flow statement.

WOW!

Mega First spend some 258.422 million purchasing 'quoted shares'?????

Holy cow!

And as usual, there is no disclosure on what's happening!

Under section B7 of its notes.

How?

I am lost for words.

Is Mega First Malaysia's super trading or investing company ?????

A New Look At Fima Corporation

Wrote the following back in 2008: Should The Investor Take The Safer Approach?

Like to highlight the following passages..

===>>>

Now, present day, the Edge Weekly has an article on Fima Corp.

• Fima Corp Bhd is jumping on the plantation bandwagon by purchasing a slice of a small Indonesian palm oil outfit. In a statement on Jan 27, Fima said it will pay RM13 million for a 32.5% stake in PT Nunukan Jaya Lestari in East Kalimantan. This is part of a plan to diversify its earnings base. read more.... (link is broken. Can't help it)

How?

Ok, an investment of 13 million is not a lot... but... here is my cow question... don't you really think that this company management, after achieving its recent success, has started to think way too big? Don't you think the company is really starting to lose focus? Diversification into palm oil???

How? Is this the 'something wrong before it drops'? Or should we want to continue the wait-and-see approach?

or... ahem... should the investor take SAFER approach... ?

<===>

FimaCorp announced its earnings last night.

Before I clicked on the announcement, I was thinking out loud to myself. What do I expect? What do I want to expect from the company announcement?

I was sceptical about the diversification into palm oil. Did not like it and in fact, I always hate to see our local companies diversifying too much. For I had always preferred to see out companies concentrate on doing what they do best. FimaCorp was making great money in printing of security and confidential documents for the government. It was their niche. That's what they do best and to see them diversifying into palm oil (just because of a booming palm oil business in 2008) did not excite me too much.

Let's look at some 'recent' earnings.

Aug 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008. FimaCorp made 14.006 million.

Nov 2008: Quarterly rpt on consolidated results for the financial period ended 30/9/2008. FimaCorp's earnings dropped to 7.952 million.

Feb 2009: Quarterly rpt on consolidated results for the financial period ended 31/12/2008. FimaCorp made 9.162 million.

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009. FimaCorp made 26.010 million!

Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009. FimaCorp made 15.334 million.

Here's last night earnings.

Not as impressive but this FimaCorp is a different FimaCorp then what I was looking at when I wrote Should The Investor Take The Safer Approach?

Compare the quarterly tables posted here and do compare recent dividends paid.

Yet again, another post which I needed to make to put the record out straight. Yes, indeed the gamble for FimaCorp to venture into palm oil has paid off!

Here's screen shot of its balance sheet.

Ah yes, FimaCorp is no longer a net cash company with no debts and FimaCorp total borrowings amount to 43.144 million.

And here is the screen shot of FimaCorp's business segmentals.

Oh this again is not an early morning tipsy! Since I am no financial expert and since I am such a flawed one, I surely cannot guarantee that you will lose money if you decide to buy based on my posting and just for the record, FimaCorp last traded at 3.23.

Regarding Texchem Resources

Comments on Texchem Resources?

I do have some archive news on this company. Perhaps it could offer you a different perspective on what kind of company you are looking at.

25th May 2007: Two Divisions to Drive Texchem

Big plans mentioned. I was more interested in the last line.

• For the first quarter ended March 31, the food division registered an operating loss of RM400,000, while its revenue of RM63.8mil was a 12.5% fall from the previous corresponding quarter.

Let's use that quarterly earnings as a marker.

Quarterly rpt on consolidated results for the financial period ended 31/3/2007. Total losses were 889k. Cash 48.457 million. Total debts 304.463 million.

7th Aug 2007. Texchem Eyes Bigger Indonesian Mart Share

• TEXCHEM Resources Bhd wants to double its mosquito coil market share in Indonesia to 30 per cent in five years.
  
  The company, which makes household insecticide products under the Fumakilla brand, wants to have a bigger slice of Indonesia's market, which is eight times bigger than Malaysia's

9th Aug 2007 Quarterly rpt on consolidated results for the financial period ended 30/6/2007. Company made 6.566 million from a revenue of 306.676 million.

Texchem Divisions¡¯ Reduced Sales with the Exception of Food

• PENANG: Texchem Resources Bhd’s net profit doubled to RM6.57 million in the second quarter ended June 30, 2007 from RM3.22 million a year earlier mainly due to an exceptional gain of RM6.2 million from the disposal of Texchem Consumers Sdn Bhd.
  
  Revenue fell to RM306.08 million from RM323.03 million mainly due to the disposal of TCSB and lower sales volume achieved by the family care, packaging and industrial divisions, which were mitigated by higher sales from the food division...

If you minus out that exceptional gain of 6.2 million, there is not much profits left for the quarter.

27th December 2007, RHB Research iniated coverage.

• Texchem Resources
  An Attractive Dividend Yielding Stock
  
  Share price : RM1.29
  Fair Value : RM1.37
  Recom : Market Perform (Initiate Coverage)
  
  ...Initiate with Market Perform recommendation. We value Texchem at RM1.37/share, based on a target CY08 PER of 14.5x. Together with our projected 2008 dividend per share of 12 sen, this suggests a potential total shareholder’s return of 15.5%, which is roughly in line with our projected return for the market. Hence, we are initiating coverage on Texchem with a Market Perform recommendation.

Always felt unease with such a recommendation. Share price was rm1.29 and they felt fair value is around 1.37. Not much upside, yes? But they justify it by saying that this is a dividend play. Let's keep watch on this issue.

Jan 14th 2008: Texchem set to make strong recovery in earnings

• Texchem set to make strong recovery in earnings
  
  By LEONG HUNG YEE
  
  PETALING JAYA: Shares of Texchem Resources Bhd extended their gains on follow-through interest on Friday.
  
  The counter closed marginally higher at RM1.28 and a breath away from its three-month high of RM1.32 recorded on Dec 27.
  
  Analysts said the counter was clearly on the radar of investors as reflected in its price movement and trading volume over the past few months.
  
  Rating agency Standard & Poor’s (S&P) has a buy call on the stock with a 12-month target price of RM1.45.
  
  It said the company was poised for a recovery in earnings going into 2008 after overcoming operational difficulties that culminated in a net loss of RM900,000 in the first quarter (Q1’07), its first since Q1’04.
  
  “We are forecasting Texchem to report net profits of RM13.1mil and RM11.2mil in 2007 and 2008, respectively, driven by a stronger performance at its packaging division coupled with the ongoing recovery at its food division.
  
  “Excluding the exceptional gain recorded during Q2 '07, recurring net profit is expected to jump 62% year-on-year (y-o-y),” said the agency.
  
  S&P said the company was attractive for its strong dividend track record and gross yield of 7.8%.
  
  It added that Texchem had managed to bring its net gearing down to 112% at end-September 2007 from 140% at end-2006, although financing costs remained high and were a drag on profitability.
  
  RHB Research projected Texchem’s earnings to rebound this year on account of better operating results from the family care and food divisions as well as lower finance costs as the company gradually pared down its borrowing levels.
  
  The research house recommended a hold at RM1.29, valuing the share at RM1.37 based on a target calendar year 2007 price-earnings ratio of 14.5 times.

Eh? Eh? RHB coverage was a market perform, no?

22nd Jan 2008: Texchem to expand this year

• ... “By 2010, the food division could be expected to generate 30% of group revenue,” he said.
  
  Texchem is also allocating RM7mil to set up seven Sushi King outlets this year in Kota Kinabalu, Miri, Bintulu and in the Klang Valley.
  
  Two new Sushi King outlets were opened in Kuching earlier this month, bringing the total number of outlets in the country to 43....

Feb 2008: Quarterly rpt on consolidated results for the financial period ended 31/12/2007. Texchem made 8.601 million from a sales revenue of 327.192 million. The earnings margin are rather razor thin, yes? (some do prefer to invest in companies that have a profit margins above 20%)

On Business Times (link lost)

• Industrial, food units boost Texchem Res pre-tax
  
  Published: 2008/02/22
  
  TEXCHEM Resources Bhd saw its pre-tax profit rise to RM29.735 million in its financial year ended December 31, 2007 from RM22.537 million in 2006.
  
  This, it said yesterday, was due to the improved performance of its industrial and food divisions, which offset the lower profits of the packaging and family care segment.
  
  In a statement to Bursa Malaysia, the group said included in the higher pre-tax profit was an exceptional gain of RM6.2 million from the sale of Texchem Consumers Sdn Bhd (TCSB).
  
  However, its full-year revenue dropped slightly to RM1.258 billion from RM1.267 billion before, due to the sale of TCSB and the lower revenue recorded by the packaging division.
  
  Although the group remains optimistic for this year, it said it is mindful of a potential slowdown in the global economy which could have an impact on its performance.
  
  In a separate note to the bourse, the group said it plans to buy a 21 per cent in PT Technopia Jakarta from Texchem Corp Sdn Bhd for RM5.903 million cash.
  
  It felt this will enable the expansion of its family care division as well as consolidation of the future earnings of the Indonesian-based firm, and increase direct penetration into the mosquito coils market there.
  
  “With a huge population of about 235 million people, Texchem Resources sees great potential in the mosquito coils and household insecticide products market in Indonesia.
  
  “The proposed acquisition therefore represents further steps towards achieving the group’s vision to be the top player in the household insecticides industry in Asean by 2010,” it said. — Bernama

8th March 2008: Texchem targets RM3.2b revenue by 2013

Oo.. I always get sceptical when company boasts out loud to the local media about their revenue targets or revenue growth. Why? Most important is the bottom line, the net profit. One can have all the glittering revenue growth but if it is not accompanied by net profit growth, it all counts for nothing. Anyway as per the earlier quarterly earnings report, we saw that Texchem net earnings were 17.915 million for fy 2007. Note the figure is boosted by extraordinary gain of 6.2 million.

10th March 2008, on the Edge (link lost)

• 10-03-2008: Texchem confident of sustainable dividend payout till 2011
  by Yantoultra Ngui Yichen
  
  KUALA LUMPUR: Packaging, industrial, food and households products group Texchem Resources Bhd is confident of an annual 12% dividend payout until 2011 on the back of its aggressive expansion plans.
  
  Texchem, which is controlled by Japanese businessman Tan Sri Fumihiko Konishi and was listed on the local bourse in 1993, paid dividends as high as 20% in 1999 and 2000.
  
  Konishi, 63, the group’s chairman and chief executive officer, said Texchem’s philosophy was to grow without asking any money from its shareholders, and only pay out dividend annually. It has not proposed any right issues since its listing.
  
  Texchem, whose belt includes Sushi King and Fumakilla, aims to achieve a RM1.5 billion turnover and RM30 million pre-tax profit in its current fiscal year ending Dec 31, 2008 (FY08), riding on its new expansion plans, which might include some mergers and acquisitions (M&A).
  
  Konishi said the group planned to expand its food division in the country as well as in Myammar via M&A as it had seen more sustainability in the food industry throughout its experience in the sector.
  
  “There are about four (in talks on possible M&A) in the pipeline,” he told reporters after Texchem’s analysts briefing last Friday.
  
  The group’s net profit for FY07 rose 8.95% to RM17.91 million from RM16.31 million in FY06 due to improvements in operational performance of its industrial, packaging and food divisions despite the disposal of its subsidiary Texchem Consumer Sdn Bhd. Its revenue hit RM1.26 billion while pre-tax profit was RM29.74 million.
  
  Konishi said Texchem also aimed to expand the number of its Sushi King restaurants to 50 from 44 at present by the end of the year.
  
  On its household division, he said the group planned to venture into new markets like Bangladesh and the Philippines by exploring the possibility of setting up household insecticide manufacturing plants in both countries.
  
  “We will allocate some RM70 million for our expansion plan and expect our overseas revenue contribution to reach 50% (from 35% in FY07) soon (in the next five years),” he said.
  
  Konishi added that Texchem expected its revenue to hit RM3.2 billion turnover and RM100 million in pre-tax profit in 2013 and it targeted to be a RM5 billion (revenue) company by 2020, with pre-tax profit of about RM200 million.
  
  Meanwhile, Konishi said Texchem would increase investments in existing markets like Vietnam, Thailand and China as well as develop more venture businesses within each division.

Rather inaccurate the article. See the comments in red. It said "The group’s net profit for FY07 rose 8.95% to RM17.91 million from RM16.31 million in FY06". Well if one minus out the 6.2 million from rm17.91 million to the disposal, then Texchem fared much poorly in fy 2007 when compared to what it did in fy 2006.

May 2008: Quarterly rpt on consolidated results for the financial period ended 31/3/2008. Revenue did increase but Texchem net profits only 1.059 million!

5th July 2008, on Business Times. (link lost)

• Texchem: EU ban eating up revenue
  
  By Marina Emmanuel Published: 2008/07/05
  
  TEXCHEM Resources Bhd's (TRB) associate company Seapack Food Sdn Bhd has seen a 70 per cent production drop since the suspension of Malaysian seafood exports to the European Union (EU).
  
  TRB chairman and chief executive officer Tan Sri Fumihiko Konishi said Seapack is expected to register monthly revenue losses of RM3 million until such time as the suspension is lifted.
  
  "Our monthly production output now stands at 200 tonnes and we hope the authorities will act quickly in resolving the situation," he told reporters after an extraordinary general meeting in Penang yesterday.
  
  Konishi said the EU accounts for 70 per cent of Seapack's exports and the company has been forced to restructure and reduce its workforce from 300 to 80 last month due to the drop in business.
  
  "We are now concentrating on the domestic market and also regional ones," he said, adding that exports now include cleaned and re-sized squid and cuttlefish, along with value-added products such as sashimi squid and also surimi items.
  
  Malaysia last month temporarily stopped seafood exports to the EU following threats of a total ban after checks on local fisheries revealed lacking health standards.
  
  The EU has threatened a total ban on Malaysian seafood following random checks in April on nine companies exporting fishery products which were found lacking in health standards and practices.
  
  Industry experts had predicted that Malaysia is set to lose more than RM11 billion during the three-month wait for the suspension to be lifted.
  
  Konishi said the latest development will not affect the operations of TRB's seafood processing company Sea Master Trading company Sdn Bhd which has 280 people on its payroll.
  
  "Fortunately, we moved fast enough to step up our exports to China and Japan since we are unable to do so to EU countries for now," he said.
  
  South Korea and Taiwan are also the company's other export markets where prawns, squid, cuttlefish, deboned fish and processed jellyfish are sold.
  
  TRB's food division currently contributes 29 per cent to group revenue.
  
  "Since our food division is viewed by TRB as its rising star," Konishi said, "we will continue to invest in this division. For this year, we will invest RM15 million to upgrade our facilities for the food division locally and overseas".
  
  Konishi also said that several new projects for the division are currently in the pipeline to expand the food business in Malaysia and abroad.

31st July 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008. Net earnings only 468k!

Oh the dividends issue.

31st July 2008: Interim Dividend. Interim Dividend of 6% less 26% Malaysian tax

15th December 2008: Second interim dividend Second Interim Dividend of 4% less 25% Malaysian tax

On 17th December 2008:

• RAM downgrades Texchem debt issue
  
  Published: 2008/12/17
  
  RAM Ratings has revised the outlook on the long-term rating of Texchem Resources Bhd's RM100 million Commercial Papers/Medium Term Notes Programme (2005/2012) (CP/MTN) from stable to negative.
  
  The CP/MTN is currently rated "A3/P2".
  
  In a statement, Rating Agency Malaysia Bhd (RAM) said the negative outlook reflects concerns about the increased prospects of lower sales and profit margins for Texchem amid the difficult operating environment.
  
  "Texchem's overall performance during the nine-month period ended September 30 2008 was below expectations, with narrower profit margins following the distribution issues faced by its family-care division and also the weaker showing of its packaging segment, which had been affected by stiff competition and pricing pressures," it said.
  
  Despite higher revenue, the group's operating profit margin eased to 1.4 per cent for the nine months, from 1.72 per cent previously.

Feb 2009. Quarterly rpt on consolidated results for the financial period ended 31/12/2008. Texchem lost 3.98 million!

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009. Texchem lost 9.232 million!!!!

• Texchem records RM9.2m net loss in 1Q
  Written by Financial Daily
  Wednesday, 06 May 2009 10:50
  
  KUALA LIMPUR: Texchem Resources Bhd recorded a net loss of RM9.2 million in the first quarter ended March 31, 2009 (1QFY09), compared with a net profit of RM1.1 million a year earlier, mainly due to the impact of the global economic downturn.
  
  Revenue fell 30% to RM242.8 million from RM347.1 million mainly due to a drop in demand for industrial, packaging and food products, despite its family care division having achieved higher sales via its Indonesian subsidiary that was acquired on April 18 last year. No dividend was declared.
  
  Texchem said yesterday the diversified group expected its business environment to remain challenging, and would continue to adopt a prudent approach towards capital expenditure while focusing on managing its trade receivables, inventories and operating cash flows to improve liquidity during this difficult period.
  
  
  This article appeared in The Edge Financial Daily, May 6, 2009.
  

July 2009: Interim Dividend Interim Dividend of 3% less 25% Malaysian tax

Ooo... interim dividend halved! This is what one has to be extremely careful. Dividends are not constant. Yes, they can increase in time (and this usually co-incides with better earnings performances) but they also can be decreased!

Oct 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009. Texchem made 1.05 million. Recovery?Not much clues given in its earnings notes.

• The Group’s revenue for the current quarter was RM318.4 million, a decrease of 22% compared to RM406.2 million reported in corresponding quarter last year. The lower revenue was mainly due to the on-going global recession which had adversely affected turnover in the Industrial, Packaging and Food Divisions.
  
  As a result, the Group generated a slightly lower pre-tax profit of RM2.7 million against the corresponding quarter of RM3.0 million.

Texchem today trades at 96 sen.