Development costs ~RM16.6 billion, out of which ~RM3.3 billion will be funded by Lotte Chemical Corp (mother company in Korea), so net impact to Lotte Chemical Titan is ~RM13.3 billion. Based on latest quarterly report, total cash and bank balances and other investments are ~RM5 billion. So after funding the development costs, net debt will become RM8.3billion, net gearing will become 0.61x, which is still okay. Development costs will be paid progressively from 2022 to 2025 and in the meantime, existing business will continue to generate profit (hopefully), which can bring down the gearing.

Disappointed with the result. Big impairment of RM1.3billion, mostly for CIMB Thai's goodwill.

Upstream O&G company will normally avoid those countries that name end with "tan". Why reach energy still decide to go there? Because it was a SPAC and time was running up, so cincai acquire something so that no need to return the money to shareholder. Hibiscus was lucky that Shell wanted to divest their Malaysia asset, but even then, insider all know those fields are very old and need to fork out a lot to decommission in the future. Nevertheless, it was still a much better acquisition as compared to Reach's.

Hahaha, delay again. How come so many big international companies can complete their audit despite travel restrictions but Serba cannot? International travel restriction at most quarantine 3 weeks only, how come Serba need extension 2 months? Talk until so nobel, uphold compliances with accounting standards, give auditor adequate time... One of the qualitative characteristics of accounting is timeliness! If simple requirement like issue annual report also cannot do, how to execute those "billion dollar projects"?

new land acquisition, 8 acres in Kepong, to be developed as M Nova, GDV RM790mil.

Wasted my time reading this article. Newbie investor trying to act pro.

good results

For new investors, 50% of Sapura's exploration & production business has been sold to OMV, meaning it is a joint venture and Sapura cannot freely use the cash from gas sale to fund Engineering & Construction business. There is also a USD350 million loan sitting at the joint venture's book. So while Sapura will benefit from high gas prices, it is definitely not enough to solve the immediate liquidity issue.

As for analyst calls, please don't selectively disclose only the hold calls. There are also 2 sell calls out of the 4 reports available here.

I will stop here. Invest wisely!

For those saying its purely revenue recognition problem, I admire your optimism. The real issue is cash flow and liquidity. Even the CEO admitted this in the press release.

If you study the financial statement closely, you will know that the company has been drawing down its revolving credit and trade facility to cover its interest payment and operational requirement. How much of these facilities remaining? Does the company have enough cash to finish off the projects so that more collections can come in? Thick order book means nothing if the company don't have enough working capital to execute the projects.

At this rate, I feel a fund raising exercise or a major asset sale (50% stake in the SapuraOMV exploration & production business, Brazil pipelay vessel or Drilling business) is inevitable.

Maybank, CIMB, RHB and AmBank are all lenders for Sapura. If Sapura really fail, will have big impact on the Malaysian banking sector, hence I also hope Sapura can recover. But the company really has to pick itself up, cannot always hope for help only. There is only so much that PNB can do.

This is my personal opinion as someone who has worked in the industry before.

I don't think the new management joined the company to enrich themselves, but they might have underestimated the underlying problems with the company. New contracts were bid at very competitive prices, but because of cash flow problem, supplier and subcontractor quoted higher prices as they have a hard time getting payment. Situation worsen when Covid strikes and project progress is slow. Already locked in workers and materials, cannot simply cancel and have to bear all the compliance and quarantine costs. Working capital invested also stuck. In fact, this is the second time already the company has to make huge provisions due to Covid. Provisions are different from impairment ya. It will have cash flow impact and I suspect is the reason why payables swell to RM3.3bn.

Another critical problem is the breaching of loan covenant for the RM10.3bn financing facilities. Not a good sign to breach something which the company just put its pen on half a year ago. Although the company has obtained waiver, there will be another round of covenant review in Q4 (from PublicInvest Report). High chance for the company to breach covenant again as it expects hurdles to continue in the 2nd half. In the event second waiver is not obtained, it is a default and banks are allowed to call back all the loans! Might also face problem qualifying itself for future projects internationally as these clients normally have very stringent requirements.

Of course, if PNB wants to, it can save the company by subscribing to rights issue or private placement or try ask Maybank to extend more loans. But how long can PNB do this without incurring the wrath of public and their fund investors?