Update On MTouche

Made the following two blog postings on Mtouche back in February 2008, MTouche and MTouche Reports Its Quarterly Earnings!

What we had was a stock whose stock price was falling off the cliff and the management came out in the press defending it's poor 2007 performance.

First artice was published on Star Biz on Feb 9th 2008, After a tough year and another article was featured on the Edge a couple of days later on Feb 11th 2008, 11 Feb 2008: Corporate: Worst is over, says mTouche

Some of the points mentioned by the boss then was:

• In defence of 2007
  
  No doubt, 2007 was a challenging year for the company. Up to the nine months to September 2007, the company recorded net profit of RM5.4mil.
  
  As indicated in its announcement to Bursa Malaysia, the poor results were largely due to higher expenses from its new subsidiaries, provision of doubtful debts and higher depreciation and amortisation of intellectual property.

and

• Yet, business-wise, Goh, who is also the CEO, describes 2007 as a "bad" and "difficult" year. That's no surprise. For one, it has yet to convince Japanese mobile phone companies to buy M-Bit. The same could be said of the company's stock price. From an all-time high of RM4.18 on Nov 15, 2006, investors sold down mTouche's shares to as little as 47 sen late last month, after earnings disappointed most of last year. Its recent rights issue was about 9% undersubscribed despite attracting excessive applications. It remains to be seen if 4Q2007 numbers — tentatively slated for release on Feb 15 — will be any different. Last Monday, the shares closed at 58 sen.
  
  "Last year was a bad year. Some acquisitions did not do as well as expected and I think we were also punished for over-expanding… We streamlined operations last year, took in new people, got rid of unhealthy parts that are not strategic to our growth going forward," Goh says.

A week later on Feb 19th, MTouche reported its earnings: Quarterly rpt on consolidated results for the financial period ended 31/12/2007

Well.. MTouche reported a whopping net loss of 15.7 million for the quarter!

Last Friday, Mtouche announced its earnings: Quarterly rpt on consolidated results for the financial period ended 31/3/2008

MTouche reported another set of losses totalling some 5.159 million for the quarter!

This is what the company has got to say.

• For the financial quarter ended 31 March 2008, the Group recorded revenue of approximately RM9.2 million. The lower revenue as compared to the preceding year corresponding period was mainly attributable to the decrease in revenue from sales of goods sold due to lower new telecommunication projects undertaken. The Group’s mobile messaging business remained relatively stable. However, the Group recorded a Loss Before Tax (“LBT”) of approximately RM5.2 million in the current quarter mainly due to the following expenses incurred:-
  
  i) provision for doubtful debts of RM2.8 million made in compliance with the Group’s accounting policy;
  ii) plant & equipment written off amounted to RM0.5 million;
  iii) increase in depreciation and amortisation of RM0.5 million;
  iv) recognition of unrealised foreign exchange loss of RM0.8 million mainly in respect of the translation of foreign currency denominated Murabahah Loan Notes (“MLN”) issued by GMO Limited; and
  v) the Group’s share of loss from its associate company namely GMO Limited of approximately RM0.6 million.

And here is how the stock is trading.

Now what's most disappointing is that at its peak, this Messdaq stock traded around 4.10.

Yet another destroyer of market capital from yet another Messdaq stock!