(10-08-2023, 07:28 PM)donmihaihai Wrote: [ -> ] (09-08-2023, 11:36 PM)dydx Wrote: [ -> ]1H results..
https://links.sgx.com/FileOpen/Penguin%2...eID=768290
Do note the financial statements the explanatory notes have not been audited or reviewed by the Company’s auditors, so it is as good as the management compiled the numbers and results announcement, and the BOD added its consent and then Penguin released it on SGX. With the latest position of the Offeror - a consortium comprising the Executive Chairman, MD and Dymon Asia Private Equity - at a critical 88.77%, common sense tells me that it will be naive to expect Penguin to post good profit numbers in the 1H results - which obviously will work against the Offeror's interest and objective to privatise Penguin for the cheap.
But frankly, I totally didn't expect the sharp 64.6% fall in group NP to only $2.4m, especially when group revenue advanced a strong 44.9% to $89.0m - with Shipbuilding/Ship Repair/Maintenance Div. +50.2% to $72.5m, and Vessel Chartering Div. +25.3% to $16.5m. Even my smart but inexperienced son - a SMU Scholar majored in Accounting - felt the extent of the profit decline unbelievable, especially since market demand and charter rates for offshore O&G equipment (rigs, vessels, etc.) have been on the rise post-Covid since 2022.
What I find totally unbelievable is that in segmental reporting (p12), Vessel Chartering Div. showed a pretax loss of ($1.48m) when revenue increased +25.3% to $16.3m, even though operating cash generation remained comfortably positive. In the explanatory notes (p23), it described that "higher marine insurance costs arising from more vessels being added to the Group’s operating fleet' contributed to the much higher operating expenses, which increased +104.1% to $7.8m. I find it hard to believe that marine insurance premiums related to more vessels added to the charter fleet could be more than the increase in charter income (revenue), resulting in turning the entire Chartering Div. from a pretax profit of +$1.43m in 1H-FY22, to a pretax loss of ($1.48m) in 1H-FY23. I really hope SGX Regco or SIAS could pick up the above abnormalities and query Penguin. If and when that happens, Penguin's Finance & Administration Director Tung May Fong would have to give proper factual explanations.
As usual, Penguin chose not to provide order backlog information on shipbuilding - which is generally available from most listed shipbuilders. From the very sharp increase and large balance under "Advance payments and deposits received (non-refundable)" of $34.32m (see p21,under Note. 15 Other payables and accruals; vs. only $4.82m as at 31Dec22), we actually have a concrete tell-tale sign that Penguin has secured a lot more new shipbuilding orders. Assuming 15% as a norm for advance payment/deposit for typically new shipbuilding contracts, we could be looking at over $200.0m in the order backlog for shipbuilding contracts backed by advance payments/deposits.
We know the Offeror wants our shares badly. In an indirect way, the just released 1H results again confirms that. I am keeping my prized Penguin shares for the next GO which should be at a much higher price more in line with the growing intrinsic value of this promising and well-placed business.
If I push it a little, the stupid me would have taken that the management committed fraud from your comment.
Regardless of what the management position is, I still consider the financial result of Penguin fairly present at the minimum. Of course, that is me.
1H FY2022 results wasn't that good. Margin is depressed since about 2 years ago and despite the higher NPAT in 1HFY2022, marketing, admin and other expense pretty much cleaned off GP. NPAT basically contributed by other income. Penguin performed better in 1H FY2023 in this aspect because of the increased in turnover. This is only part of the story, to understand Penguin number, one need to understand how Penguin operates because Penguin build to stock/operate and make opportunistic disposal, a good part of the profit will not come through turnover and COGS and it is also understandable that the management is able to control the timing of disposal but I would say that for this part, it is built in because any investor who invested in Penguin should know about this.
My comment will piss people off, but words can kill, and I don't see that the management deserve to be painted to such a degree by words.
It is perfectly alright to be sceptical, but to suggest, paint and use selective data is another. So let me finish this since I started it.
1st.
1H 1H
2023 2022 2022 2021 2020 2019 Year
88967 61409 135227 123649 119417 136337 turnover
22332 15662 35916 37179 33919 40570 COGS
25% 26% 27% 30% 28% 30% GP Margin
-19755 -15212 -31486 -29313 -28323 -27830 Op expenses
-22% -25% -23% -24% -24% -20% % of turnover
3% 1% 3% 6% 5% 9% GP margin less Op expenses
2419 6842 10554 12668 13207 19414 NPAT
3% 11% 8% 10% 11% 14% NPAT Margin
From the above, It is very clear that a) GP margin is declining, b) operating expenses increasing, c) operating expenses clean off a huge portion of the gross profit and d) a big portion of the NPAT contributed by other income. For 1HFY2022, almost all of the NPAT contributed by other income while margin at 11%. 1H FY2023 is another story, the only period in the above period where other income contributed the least.
To say that cost recognised in this period not that period don't even fly here. Just think about it in percentage. the different between 1HFY2022 & 1HFY2023 GP margin is only 1% and other income contribute like >10% NPAT margin. Where is the elephant? The place to look for is other income and as I wrote earlier, this is the place where management has control and should have control on when to sell operating vessels.
2nd.
Segmental
chartering.
Lost in 1H 2023 of -1.5M as compared to profit of 1.4M in 1H FY2022. Let put in more information,
Shipbuilding
Profit of 4.6M in 1H2023 as compared to profit of 2.8M in 1H2022.
adjustment and elimination
Profit of 1.5M 1H 2023. as compared to profit of 4M in 1H2022
Just these number alone, think about it. why show losses in chartering then higher profit in shipbuiding(which never been mentioned here). Then there is a huge 4M in 1H2022 adjustment and elimination. For anyone looking for answer, I urge you to read the segmental, follow the notes, compare to P&L and other income. the answer jump straight out.
Just as increased in insurance is put in as one of the reasons for increase in expenses by the management, the bigger item is actually forex, gain of 1.2M in 1H2022 as compared to loss of 1.4M in 1H2023. a swing of 2.6M which reduce profit. (not mentioned of course)
I don't know whether this 2.6M hit shipbuilding or chartering in segmental results. Likely to be both segments because not a lot of SGD involved in chartering and shipbuilding. So just ignore it, then what, there was gain of $2.8M on disposal of PPE which was mainly vessels in operating. This gain pretty much explains the profit in 1H2022 chartering segment. Without the disposal, chartering was loss making in 1H2022. How do i know that, because PBT in segmental matches P&L figure and one can figure out the whole thing easily.
I can split out the number because as I wrote earlier, number presented fairly, at minimum. I can't do it without the "communication" given in the financial statements.