Green Packet Boss Keeps Saying EBITDA Positive... But...

I always like to gauge a CEO or MD by what they say in the press.

For example, let's take the case of Green Packet.

On today's Edge Financial Daily: Green Packet’s target to be Ebitda positive may be delayed

• Green Packet Bhd’s target to turn earnings before interest, tax, depreciation and amortisation (Ebitda) positive by year-end may be delayed to next year following South Korea’s SK Telecom buying a 25.8% stake in its subsidiary and WiMAX arm, Packet One Networks (Malaysia) Sdn Bhd (P1), for US$100 million (RM325 million).
  
  “We were targeting for Ebitda to break even and turn positive by end of 2010, but after discussions with our new partner (SK Telecom), we are going to be more aggressive this year in expanding our network, advertising and gaining subscriber base,” said Green Packet group managing director C C Puan after the signing ceremony to seal the alliance between P1 and SK Telecom here yesterday.P1 CEO Michael Lai said the new target was also dependent on the subscribers gained and the average revenue per user (ARPU) by next year.

Firstly, it's strange to see current day MD and CEO talks about EBITDA.

Comeon... what's good is the earnings before interest, tax, depreciation and amortisation (Ebitda) to the minority shareholder?

Common sense question? What about tax? Tax no need to pay? Depreciation and amortisation is not required?

Comeon.. no need twist and turn and no need to insult the minority shareholder's intelligence. Just tell us the net earnings. Yeah, where is ze moola? Just show us the moola!!!

That's all the minority shareholders is interested in.

And EBITDA positive. So that's their plan.

Anyway... let's indulge with this six letter word and let's put away ze brains for a moment and pretend and yeah, let's imagine that EBITDA is the holy grail and it is so, so so important. Ok?

Anyway what do we have? Iin today's news article, Green Packet says their plans to be EBITDA positive has to be postpone to next year.

Let's travel back to time. Hehe.. back to the past. :P

Feb 2008. Green Packet aims to regain sales momentum after weaker year

• Managing director Puan Chan Cheong said that in terms of profitability, the company's solution business ought to contribute "good double-digit" net profit growth this year, while its WiMAX business will still be in "investment mode".
  
  "Nevertheless, we expect the WiMAX business to be ebitda (earnings before interest, taxes, depreciation and amortisation ) break-even this year," he told the media in Kuala Lumpur yesterday.

That was the promise made in Feb 2008. Star Business carried an even more bolder version: Green Packet sees 100% growth in revenue this year

• KUALA LUMPUR: Green Packet Bhd, which reported 24% higher revenue of RM122.84mil for the year ended Dec 31 (FY07), expects a 100% growth in revenue this year as its diversification plans start to bear fruit. Group managing director and chief executive officer Puan Chan Cheong was confident of the “achievable” target, as the company had diversified its markets to cushion the impact of a slowdown in any one region.

ps: He was talking about REVENUE growth and not earnings growth.. :P

May 2008: WiMAX major earner for Green Packet

• “For all three phases, we will require funding of about RM700mil. Once the network is commercialised, we are targeting to reach EBITDA positive by the end of next year,'' said Puan.

May 2008: EBITDA positive by end of next year.

7 Feb 2009: Green Packet set for a comeback

• Despite the heavy capital expenditure required for the rollout of WiMAX, Puan expects earnings before interest, tax, depreciation and amortisation (EBITDA) of Green Packet’s service pillar to turn positive by year-end.

Feb 2009: EBITDA positive by year end.

May 2009, Green Packer losses increased by SEVEN FOLDS!

On Business Times. Green Packet Q1 loss widens on broadband rollout cost

• GREEN Packet Bhd, a company that develops telecommunication solutions and offers wireless broadband services, said its first- quarter net loss widened more than sevenfold despite higher revenue, due to the cost of rolling out its wireless broadband services.

Yeah.. see how pointless it is to talk about REVENUE growth! What's good is it to have higher revenue growth when the losses widens more?

• "By the end of this year, P1 would be Ebitda (earnings before interest, tax, depreciation and amortisation) break-even and will be cashflow positive from next year," said Puan

Aha... May 2009, boss said EBITDA will break-even from next year.

Ahem.. EBITDA will break even from next year.

12 Feb 2010: GPacket Q4 loss up on higher cost

• Puan concurred that the group could return to positive EBITDA in the second half of this year.This would be achieved through additional customers for its international devices as well as connection management solutions business, besides more than doubling its WiMAX current network infrastructure and subsciber base this year.Green Packet expects to spend RM250mil to double network sites from 650 currently.Its subscriber base is also expected to more than double by the year-end from 140,000 as at the fourth quarter of last year.

12 Feb 2010, EBITDA positive in the second half of this year.

And recently, May 14th. Green Packet believes worst is behind it

• Although the firm's first quarter net loss expanded to RM44 million, from RM22 million in the same period last year, the company remained optimistic that it will be able to achieve an Ebitda (earnings before interest, tax, depreciation and ammortisation) break even by the end of this year.For the first quarter ended March 31 this year, it posted a narrower Ebitda loss of RM29.8 million, an improvement from a loss of RM56.2 million in the fourth quarter of last year."These are planned losses, as we need to invest heavily to roll out our broadband coverage. In the second quarter of 2010, we expect (Ebitda) losses to be narrower, and by the end of this year, we will break even," said group chief executive officer Puan Chan Cheong after its media briefing in Petaling Jaya yesterday.Puan attributed the improvements in remaining quarters to its growing broadband subscriber base, as well as expansion in coverage.

May 2010, still say EBITDA positive by end of the year.

Now 30 June 2010. The EBITDA plan is delayed to next year!

How?

And in the meantime, since not EBITDA positive, the losses keeps coming for Green Packet!

So how exactly would you gauge the boss?

And do you want to hear him utter this six letter word... E-B-I-T-D-A again????

Seriously, don't you think it's much better that the company just deliver the result than to make such statements to the investing public?

Doncha?