A Look At Scomi's Earnings

Since I blogged on Scomi Engineering's Quarterly Earnings I was interested to read on how its holding company, Scomi Group, performed. More so since I had blogged on it many times before ( see here )

Firstly, a Business Times news brief.

• SCOMI Group Bhd’s third quarter net profit was up 19 per cent to RM23 million mainly due to contributions from the energy and logistics engineering divisions.
  
  Revenue for the quarter to September 30 2009 was 19 per cent higher to RM424.1 million mostly generated by the oilfield services division and the energy and logistics engineering division.
  
  Scomi said its oilfield services division will continue to be hit by the global recession this year but its rail unit would lead its performance this year.

Net profit up 19 percent.

But it doesn't state HOW the numbers were up! It's like, what are the comparison figures used? Time to dig out DJ Tables for a better picture.

Ah.. comparison was made versus previous year same period.

However, as one can also clearly see, the 9 months comparison, showed that Scomi's current 9 moth fiscal earnings total of 53.338 million showed a decline of 22.35 million or a decline of around 29 percent!

Hmm.. decided to highlight the positive only? (Isn't this so typical nowadays?)

Anyway, in May 2009, I wrote the following: A Quick Look At Scomi Group's Latest Earnings

In that posting I highlighted the key balance sheet issues. Let me repaste here and I will add in this quarterly earnings numbers in red font and new comments in brown.

Back to May 2009 >>>>>

I was also curious on some of the key balance sheet issues mentioned last time. I would mark the current numbers in green.

1. Cash is at 87.595 million. (Cash now is at 301.518 million.) Cash is now 135.191 million. Cash is now 138.616

Cash balances did increased but the increase is so minute. Now I am wondering. In Aug, Scomi said it had net profit of some 20.853 million and yesterday its net profit was some 22.975 million. Adding them up, since May 2009, Scomi had some net profit of 43.828 million. So why hasn't the cash balances reflect these much improved net earnings? Where the Moola go?

2. Trade receivables has increased to 438.430 million. (Trade receivable is now at 497.968 million.) Trade receivables is now at 862.085 million!!!!!!!!!!!! Trade receivables is now at 868.648 million.

And needless to say, why are these receivables so high and for so long? Why hasn't Scomi Group made an attempt to collect these receivables? Could they not be collected? If no, then shouldn't these receivables be re-classified as bad debts?

3. Group's borrowings is now at 918.363 million. (Group borrowings is now at 1.330 BILLION!!) Group's borrowings is now at 1.273 Billion. Group's borrowings is now at 1.308 Billion!!!!!

>>>>

How?

Since receivables to a company equates to what is owed to the company, does it make sense for Scomi to owe the bank a staggering 1.308 billion when other people owe them some 868.648 million?

Owe bank, one need to pay interest.

Others owe you, do you get interest for amount owed?

I wonder.

Oh, needless to say, some would be extremely quick to point out the rights issue!

Yeah, Scomi wants the local market help ease their financial burden. Yeah, Scomi wants the local market to 'invest' more money in them! LOL!

(ps: Silly me, why can't Scomi collect those receivables, ah?)

How?

You want or not? You want to 'invest' or not? Shares that had rights issue and warrants had been so popular recently mah. It's the IN thing, no?

No need to talk fundamentals, just buy!

LOL!

Oops... where's my disclaimer?

DO NOTE THAT I HAVE NO IDEA IF YOU CAN LOSE MONEY IF YOU DECIDE TO LISTEN TO MY FLAWED COMMENTS!

That should do it!

:D