Posted by Probability > 2015-02-25 21:13 | Report Abuse

Wah...Icon...you are very good asset for i3!

Posted by Icon8888 > 2015-02-25 21:40 | Report Abuse

Probability the writing help me to think

That insight and command of details cannot be obtained without putting thoughts down in words

Posted by calvintaneng > 2015-02-25 21:41 | Report Abuse

Oops, thought I was in Bj Corp forum?

Posted by Icon8888 > 2015-02-25 21:57 | Report Abuse

Calvin, they made sampan

Not your mighty bulk carriers

Unlike rich Singaporeans like u, we Malaysian can only afford sampans

Posted by Icon8888 > 2015-02-26 11:23 | Report Abuse

i did a quick review

Based on preliminary analysis, it seemed that the negative figures were mostly due to changes in working capital. For example, in FY2014, there was an increase in amount due from customers totalling RM53 mil and increase in receivables totalling RM44.4 mil. These are normal trade related items. There are neither positive nor negative from economics point of view. The important point is that collection is managed effectively and there is no huge amount of bad debts (a quick check of financial statements showed that this is not a major issue).

Just to double check, I inspected Nov 2014 quarterly report. Net assets is RM186 mil, inventories is RM87 mil, debtors are RM184 mil, payables are RM120 mil. When put together, these figures looked balanced and normal. Nothing to be alarmed at.

In my opinion, negative cash-flow that you need to pay attention is those that comes with a lot of capex (a famous case is London Biscuits). It is an indication of trouble either due to (1) irrational spending ("Rolls Royce" items); or (2) bad corporate governance; or (3) lack of competitive advantage and require continual spending to sustain performance.

I hope I answer your question. Please feel free to disagree if you find further valid points to show that negative FCF is indeed a problem for this group.

Posted by Steve Ong Wei Siang > 2015-02-27 15:57 | Report Abuse

Thanks for the write-up. But OSV is already in oversupply condition with Daily Charter Rate declining. And the current low CO price will also discourage O&G Capex.