i afraid this non recurring charges is not time bis, may be there are some more in the future...anybody got any ideas how much more need to charge off??
Because pharma charges lowest, think you can find another to compete, an entry barrier? Hihi, they already explain...the charges is on amortization of system (accounting treatment), there is more to come. This is a narrative i usually observe to tone down the sentiment. Like tm case, losses after impairment, but cash flow still good. And it climbs back some of the lost ground.You worry? I am not.
Amortise is similar like deprection , the concept is the same . just the name is different
depreciation is for fixed assets, tangible assets (which we can see)
amortise is for software, system, rights that all this cannot be touch or see
so when PHARMA make a system , then start to use it, it need to be amortise throughout the period is like this system also contribute to small part of the comapany sales
goodwill 131m, software 18.5m, rights to supply 209m
total amounting 400.9m
"The carrying amounts of goodwill allocated to the Group’s cash-generating units (“CGUs”)
The recoverable amounts of the CGUs are determined based on value-in-use (“VIU”) calculations. Cash flows are derived from financial budgets approved by the Directors covering a range of five-year period to ten-year period that reflects the product lifecycle. The projections reflect management’s expectation of sales volume growth and product margins for the CGUs based on current assessment of market share and expectations of market growth and the continuity of the concession agreement with the government."
The key assumptions used in the value-in-use calculations are set out below: • Business analysis – The cash-generating unit makes assumptions about the demand for these new products under development in the market place and the continuity of the concession agreement with the government. These assumptions are used to drive the planning assumptions for sales volume taking into consideration the projected timing for development, testing, registration and commercialisation using a projected long-term average growth rate of 3% to 5% (2017: 3% to 5%) per annum. • Discount rate – In measuring the recoverable amount based on the value-in-use calculations, discount rate of 11.60% (2017: 9.46%) per annum has been applied. The discount rate reflects the prevailing market rate applicable to the industry adjusted for the risk of the assets.
''Due to the shorter than expected contract period awarded to Pharmaniaga of only five-year, we estimate that the amortisation rate of PHIS will doubled to about RM10.0m quarterly and RM40.0m annually for the next five years from 4QFY19 onwards.''
i think gov wont stop the tender as pharma major shareholder are boustead and kwap.. it will be like NAFAS when gov award direcly although open tender is call
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Posted by Shines > 2019-11-20 06:12 | Report Abuse
Right T800T, you got what I have been thinkng.