Insas has just released its 3^rd quarter result on Friday.  Revenue has increased by 112% q-on-q.  However, both the Net Profit and EPS have dropped 6 and 8% repectively. 

 

 

This seemed to be due to an increase in Other Operating Expenses of 33.9M.  

 

 

The main contributors towards the increase are as follows:

 

 

Hence, I decided to zoom into the financial reports and have worked out the following figures and ratios:

 

Income Statement

1.       Profit Before Tax Margin dropped from 49.2% to 21.7%:

2.       Gross profit Margin improved from 30.9% to 31.7%;

3.       Other Income improved 17.1M due to the Gain on Disposal of Quoted Securities (Note 2);

4.       Administrative Expenses increased 3M to 6.9M;

5.       Other Expenses increased 33.9M (Note 4) mainly due to:

·         Impairment of Financial Assets 17.1M (Note A5),

·         Unrealised Loss on Exchange Differences 23.1M;

6.       Finance Costs increased 1.2M (Note 5) due to Dilution of Equity Interests in Associate Companies;

7.       Exceptional Item worsen another 1.8M;

8.       Share of Profits from Associate Companies reduced 29.2% to 7.7M.

 

 

Balance Sheet (Current quarter vs Preceding Financial Y/E 30/6/2014)

1.       Long Term Investment in Associate Companies increased by 68.3M;

2.       Trade Receivable and Trade payable ratio improved to 3.9x, compared to last FYE of 4.9x, while the amount involved only increase by 2M from 271M last FYE;

3.       Amount Due from Associate Companies increased 82.5M;

4.       Cash and Deposits increased to 520.8M vs Short Term Loans and Borrowings of 322.3M. Net of 198.5M, equivalent to 29.9 sen per share vs last FYE of 19.9 sen per share;

5.       New Long Term Redeemable Preference Shares of 95.9M (Note B8);

6.       Current ratio of 2.6x (1,329.3/513.3).

 

Cash Flow Statement

1.       Net Cash Used in Operating Activities improved to -28.1M, but still remained in the negative territory;

2.       Cash Flow from Investing Activities increased mainly due to the Proceeds from Redemption and Disposal of Available for Sale Investment of 85.4M;

3.       Positive Net Cash Generated from Financing Activities due to Proceeds from Issuance of Redeemable Preference Shares of 132.6M;

4.       Overall improvement of Cash and Cash equivalents at end of the financial period.

 

The Group Borrowings shown on Note B8 however needs to be highlighted.

 

 

The company should be better off by 10.7M (336.1M-325.4M) in term of Unrealized Loss on Exchange Difference due to the improvement of the foreign exchange rate shown below.  This works out to be to 1.61 sen per share.

 

Adding the 1.6 sen back to the rolling 4 quarters’ EPS of 13.73 and the P/E remains as 7.03, the market price should be 1.08. 

 

 

 

 

 

Disclaimer:

Any prices and quotes published are purely indicative and for information purposes only. Indicative prices and quotes shown herein may vary significantly from indicative prices or quotes available from other sources. However, information and opinions expressed will be subject to change at short notice, and no part of this blog is to be constructed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or otherwise. I do not accept any liability or responsibility directly or indirectly that may arise from investment decision-making based on this blog.