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.
- 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.
- The dumping of plywood products by China into Middle East and South Korea has affected the order book of the Group.
- 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.
- 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!
How?
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