Update On Swee Joo's Earnings

Blogged previously Shipper Swee Joo Announces Losses

Swee Joo announced its quarterly earnings on Monday and its horror showing continued.

Quarterly rpt on consolidated results for the financial period ended 31/12/2008

Losses increased from 2.406 million the previous quarter to 3.761 million.

Total cash balances is at 21.9 million while total borrowings remained incredibly high at 431 million.

This is what the company had to say in its notes.

• For the current quarter ended 31st December 2008, the Group recorded an increase of 5.9 % on turnover compared to same quarter of previous year (from RM 86.4 million in 1st Quarter 2008 to RM 91.5 million in 1st Quarter 2009). However the result for this quarter was a loss before taxation of RM 3.55 million compared to a profit before taxation of RM 9.45 million in the same quarter of previous year . The decrease on profit before taxation during the current quarter under review compared to same quarter last year was mainly due to the combination of the following factors:
  
  (i) Substantial decrease in load factor as a result of the global economic crisis which impacted the demand for goods and thus reduces the cargo available for shipment;
  (ii) Higher finance expenses due to borrowings to finance the expansion of property, plant and equipment; and
  (iii) Reduction on average freight rate.

Three deadly factors.

Decrease in load factor equals decrease in sales or less demand.

Higher finance expenses equals higher cost.

Reduction on average freight rate equals lower average selling price.

How?

The following chart shows how Swee Joo is doing the past two years.