O'Mighty Capital Articles Archive
Sapura Energy is Worth -83 sen (Negative)
See our original here
Although plenty had been written off, we still see a whole chunk of goodwill and investment in associates that likely turn unfruitful (Seadrill) in the future.
Based on the goodwill alone, the value per share had already gone into the negative region. Have a look an see what you think…
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Be the first to like this. Showing 34 of 34 comments
we dont value it because those expense goes to development of digging holes. If a company takes over, likely they wont pay and will do the development once again on that particular hole.
2018-03-28 17:25
omightycap, this seems like an arbitrary exercise. Please don’t scare less knowledgeable member here like this. This 5 minute work spent by you may have negative repercussions on non-financial savvy members. Be responsible. Valuation should not be done like this
2018-03-28 17:37
John,
As investors, you must be conservative. Accounting have their own standards of recognition. It over values and undervalues certain things.
Omighty,
Those holes are the ones with trillions of cubic metres of gas etc right?
Its probably a touch to excessive on your end. But i have a problem putting a value on SAPRNG that is not zero anyway. The company is just making money for the banks only. Investors get nothing.
2018-03-28 17:41
Omighty background and whether he trustable. All IPOs he recommended under water now.
http://klse.i3investor.com/blogs/omipo/
2018-03-28 17:47
based on ur estimate there is a huge borrowing of rm 14.6B, i suppose its a LTL. h this is worrying. ur feedback is appreciated. tq
2018-03-28 18:04
I think the country regulator need to monitor and action on those companies that will shock the financial system, like China is doing now (maybe there already doing that) The borrowing is quite huge 15bil, maybe bigger than certain states coffer. What do u think?
2018-03-28 19:33
Pang, goodwill is an accounting plug. Because when you acquire a company with any amount above Net asset balance sheet is imbalance after consolidation without goodwill. Thus the sensible one would take goodwill as what it is, a number where accountant use to balance the balance sheet. So the statement that auditor approved is moot in a investing decision.
2018-03-28 21:14
if the acquired asset associated with the goodwill did not perform for a foresee able future or shut down, then need impairment....
2018-03-28 21:22
Hi John,
The holes belong to other people maybe Petronas in general.
To open up a hole, the development cost can include geological survey, weather, or even physically pulling the rig to the ocean. Expenses in oil and gas properties noted as an asset because it has yet to see depreciation. It basically meant if we don't invest this money the servicing job cant be done.
Obviously you can argue its a work in progress but logically if a company takes over, the due diligence of an abandoned hole is likely to be done again...
I agree its excessive discount on our part but we are still firm placing a BIG ZERO on GOODWILL will explain in maybe the next article
2018-03-28 22:13
Ginger, they are speeding up their debt payment it would take awhile before it gets ugly. On the way to get ugly? Yes. Bankrupt? Not likely, banks aint stupid
2018-03-28 22:14
Problem malaysia oil gas company.
https://klse.i3investor.com/blogs/muze/140968.jsp
https://www.youtube.com/watch?v=t7PPS886Fj4
2018-03-29 09:18
28 Mar 2018 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) Disposed 1,228,200
28 Mar 2018 AMANAHRAYA TRUSTEES BERHAD - Disposed 10,000,000
27 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 3,988,500
26 Mar 2018 AMANAHRAYA TRUSTEES BERHAD - Disposed 5,000,000
23 Mar 2018 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) Disposed 1,391,000
20 Mar 2018 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) Disposed 23,000
20 Mar 2018 AMANAH SAHAM BUMIPUTERA Disposed 3,000,000
19 Mar 2018 AMANAHRAYA TRUSTEES BERHAD Disposed 3,019,800
19 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 2,000,000 376,082,463
19 Mar 2018 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) Disposed 66,000
19 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 5,000,000
19 Mar 2018 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) Disposed 125,000
15 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 120,000
14 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 4,000,000 383,202,463
13 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 6,306,001
12 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 3,500,000
9 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 2,750,000
7 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 3,100,000
6 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 10,026,580
5 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 1,200,000
2 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 1,600,000
1 Mar 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 800,000
23 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 650,000
22 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 50,000
20 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 2,578,300
15 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Acquired 29,000
13 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 6,000,000
12 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 2,728,600
9 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 13,529,000
8 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 13,000,000
7 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 12,000,000
6 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 12,000,000
5 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 7,250,000
2 Feb 2018 EMPLOYEES PROVIDENT FUND BOARD Disposed 4,338,900
2018-03-29 09:27
If apply all goodwill fully impaired and loss making business asset worth no value, then alot of companies in KLSE worth nothing and maybe negative. You can pcik one by one and give them negative TP. Hahahaha. Then no body will take loan to acquire company, because once you add liability to acquire company, the company straight worth nothing base on your theory.
2018-03-29 09:29
angelol is basically correct.
I think better you do cash flow analysis. Is it enough to sustain, pay expenses and debt? That will yield much better and proper information. Value of asset we won't know for sure until it is sold, so better don't use.
2018-03-29 09:51
Omighty,
You won't find me contending that goodwill zero valuation! Haha
2018-03-29 11:51
When people do impairment testing, they are based on cash flow of certain period, normally is 5 years the discounted it using WACC. Further they will add in a "Terminal value" to represent the indefinite amount of cash flow. This kind of impairment calculation is very very conservative. It like telling people the business is going to be bad until the end of the world and its very objective. Impairment of goodwill only happened when the subsi that you acquired previously with premium price is not generating net cash inflow.
2018-03-29 14:13
If i take loan 100m acquire a company which net asset only 60m and 40m become goodwill, afterthat you write off my goodwill, i now has 100m liability and 60m asset which make me has a negative 40m net liability, oh then you will say this company worth -XXX. Haha is it like that? So you think all company acquisition should buy at NBV la? Go tell Tony, AAC in Airasia should not sell so high. LOL
2018-03-29 14:20
Nice one Angelol..the more negative comment from people, its signal for me to add more sapn. Thanks
2018-03-30 01:28
how much is company worth?
even the CEO may have no clue.
its so messy...now they tempt you to buy because they say got lots of jobs and after impairment, less depreciation.....and a lot of their assets needs impairments.....
yeah,,,goodwill on consolidation is probably worth zero zero as well based on what we know. so what is the company worth?
the ceo is guessing because he got no clue.
analysts colluding with company..hates this kind of management.
2018-03-30 02:39
analysts have been trained to say impairments are non cash items, non recurring, ...ignore.
for those who want to see good governance, how can that be good?
2018-03-30 03:15
Many dont understand that the impairment is caused by the global sentiment as well as supply demand of O&G. Its never the company fault. As long as the company has competitive advantage and core competences, it will return when the global environment for the industry turns good. Whether SAP is a good buy is based on the environment, not impairment or not impairment. In fact the impairment is heavily affected by the environment as well.
2018-03-30 10:32
haha, added some. if down to 0.45.. tambah bamyak lagi. gaji bulan march dah ada.
2018-03-30 10:40
qqq, yes you can change horse, i just wonder why are you here? Haha, changed horse and still look back? 好马不吃回头草 move on. For me, Sap is affected by environment, it is a good horse with competitive advantage.
2018-03-30 11:01
goodwill eventually need to be written off .................just matter of time.
2018-03-30 11:57
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The oil&gas properties should be worth the amount on paper.
2018-03-28 17:23