Del Monte Pacific

(30-06-2015, 09:06 AM)testwrite Wrote: this is latest result
http://infopub.sgx.com/FileOpen/DMPL_4Q_...eID=357819
for fiscal year 15

loss is (38,047)

the loss cause by
acquisition-related and non-recurring expenses worth US$62.6 million, after tax

Inventory step-up of US$24.6 million

but there is a gain of income Bargain Purchase- Sager Creek (26,568)

assume we remove all the 1 off items, the profit is 23000

that is 1.8 us cents per share

at current price of 0.345

P/E is about 14.2

total debt is 2,306,005

which is 180 cents per share, continue this down, it will takes 100 years to pay off the debt

The company is chewing an out-sized bite now via LBO. It is a risky venture. The "digestion" (integration) will take few years, and the result is pretty uncertain, IMO

(not vested)

Del Monte Pacific raised to ‘buy’ by DBS with target price of 70.5 cents. Anybuddy agree?

http://www.theedgemarkets.com/sg/article...pe=Markets

-nv-

the report says

These are now behind us and we expect DMPL to post a turnaround in FY2016 to register a net profit of US$52 million,” says Sim.

that is 4.1usd cents per share, and growing, of course if that is true, the share looks cheap at 0.4 sgd

i have no way to forecast that earning, I guess, the analyst does make a difference to stock prediction

(02-07-2015, 01:43 PM)testwrite Wrote: the report says

These are now behind us and we expect DMPL to post a turnaround in FY2016 to register a net profit of US$52 million,” says Sim.

that is 4.1usd cents per share, and growing, of course if that is true, the share looks cheap at 0.4 sgd

i have no way to forecast that earning, I guess, the analyst does make a difference to stock prediction

I did a quick check, US$ 52 mil, with outstanding share of 1943 million shares (ex-Treasury), means slightly less than US$0.027, or S$0.037

At the current price of S$0.42, the P/E is more than 15. I wonder the rationale for the "buy". May be a "buy" for the future.

(not vested)

anyway, analyst earning forecast are notoriously fickle, inaccurate. In the end, it is your money, you have to judge is this where you want to put your hard earn money

I was looking at EZRA and why the big fall in price and i notice, i got an email by DBS analyst recommending a strong buy of EZRA, attached below, i remove the analyst name, the profit of EZRA was 66M when the report came out, and 2013 profit is 53 M followed by 2014 45M, looking at the price then of 1.05 and now 0.168, you lost 84%, if you follow the report

but interesting to note, althought EZRA, is generating postive profit, but free cashflow is negative, and profit not back by cash does not count


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Ezra Holdings, Buy S$1.05, (Resuming coverage), Bloomberg: EZRA SP
Firing on all cylinders
Price Target : 12-Month S$ 1.30


• Expect catalysts from strong subsea order momentum
• Offshore support to post improved profitability
• Balance sheet concerns easing, with recent refinancing of CBs
• Resuming coverage with BUY, TP S$1.30; discount to book value to
narrow with earnings recovery

Expect catalysts from strong subsea order momentum. We expect Ezra’s subsea
order wins to ramp up across FY13/14 to US$1.0bn/US$1.5bn, following strong
YTD order wins of US$315m, as it bids for >US$4bn of subsea work globally.
Its sizeable backlog of c. US$1.1bn ensures that its subsea fleet is well
booked through FY13, driving earnings upside from positive operating
leverage.


Offshore Support emerging from the woods. We see improving demand-supply
dynamics in the OSV charter markets, supporting the firming of OSV day
rates since 2011. Along with lower expected vessel maintenance downtime in
FY13/14 and management’s focus on boosting operational efficiency, we
expect gross margin expansion at the Offshore Support division of
5.5ppt/3.1ppt across FY13/14.


Balance sheet concerns easing. Ezra has recently refinanced the bulk of its
outstanding convertible bonds, easing concerns over its ability to
refinance these. It will also refinance near term debt with the majority of
the proceeds raised from the recent issue of notes and perpetual
securities. More possible non-core asset disposals would further ease its
balance sheet.


Multiple drivers in place to underpin gradual earnings recovery. After a
series of disappointing quarterly earnings performance across FY12 on poor
offshore support performance and higher admin expenses, we believe the
group is on a firmer footing and is poised to deliver earnings recovery of
203%/72% in FY13/14F.


BUY, TP of S$1.30; recovering earnings to drive upside. Our TP for Ezra is
pegged to 0.9x FY13 P/BV vs. its historical average of 1.9x. At 0.8x FY13
P/BV, we believe most of the negatives are priced in. We resume coverage on
Ezra with a BUY call as its stabilizing and recovering earnings across
FY13/14 should lead to a narrowing discount to book value, driving upside
from current price levels.



To read the full report, please LOGIN to www.dbsvonline.com and follow the
steps below:-
1. Click on Quotes and Research
2. Select Reports


To learn DBSVOClarity or any web features, please feel free to call me
directly at (65) 6398 7579/93666746.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Market Outlook Seminar 2013, Tues 15 January, 7:00pm – 9:30pm
Hear from Yeo Kee Yan, our Singapore Retail Market Strategist, as he shares
his views on what’s in store for investors in 2013. Admission fees are $10
per person. Visit www.dbsvickers.com/seminars to register.

(02-07-2015, 03:16 PM)testwrite Wrote: anyway, analyst earning forecast are notoriously fickle, inaccurate. In the end, it is your money, you have to judge is this where you want to put your hard earn money

I was looking at EZRA and why the big fall in price and i notice, i got an email by DBS analyst recommending a strong buy of EZRA, attached below, i remove the analyst name, the profit of EZRA was 66M when the report came out, and 2013 profit is 53 M followed by 2014 45M, looking at the price then of 1.05 and now 0.168, you lost 84%, if you follow the report

but interesting to note, althought EZRA, is generating postive profit, but free cashflow is negative, and profit not back by cash does not count


Please DO NOT REPLY to this
computer generated message.
To unsubscribe research materials, please furnish us your trading account
number and full name for verification and email to info-sg@dbsvonline.com
directly.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Ezra Holdings, Buy S$1.05, (Resuming coverage), Bloomberg: EZRA SP
Firing on all cylinders
Price Target : 12-Month S$ 1.30


• Expect catalysts from strong subsea order momentum
• Offshore support to post improved profitability
• Balance sheet concerns easing, with recent refinancing of CBs
• Resuming coverage with BUY, TP S$1.30; discount to book value to
narrow with earnings recovery

Expect catalysts from strong subsea order momentum. We expect Ezra’s subsea
order wins to ramp up across FY13/14 to US$1.0bn/US$1.5bn, following strong
YTD order wins of US$315m, as it bids for >US$4bn of subsea work globally.
Its sizeable backlog of c. US$1.1bn ensures that its subsea fleet is well
booked through FY13, driving earnings upside from positive operating
leverage.


Offshore Support emerging from the woods. We see improving demand-supply
dynamics in the OSV charter markets, supporting the firming of OSV day
rates since 2011. Along with lower expected vessel maintenance downtime in
FY13/14 and management’s focus on boosting operational efficiency, we
expect gross margin expansion at the Offshore Support division of
5.5ppt/3.1ppt across FY13/14.


Balance sheet concerns easing. Ezra has recently refinanced the bulk of its
outstanding convertible bonds, easing concerns over its ability to
refinance these. It will also refinance near term debt with the majority of
the proceeds raised from the recent issue of notes and perpetual
securities. More possible non-core asset disposals would further ease its
balance sheet.


Multiple drivers in place to underpin gradual earnings recovery. After a
series of disappointing quarterly earnings performance across FY12 on poor
offshore support performance and higher admin expenses, we believe the
group is on a firmer footing and is poised to deliver earnings recovery of
203%/72% in FY13/14F.


BUY, TP of S$1.30; recovering earnings to drive upside. Our TP for Ezra is
pegged to 0.9x FY13 P/BV vs. its historical average of 1.9x. At 0.8x FY13
P/BV, we believe most of the negatives are priced in. We resume coverage on
Ezra with a BUY call as its stabilizing and recovering earnings across
FY13/14 should lead to a narrowing discount to book value, driving upside
from current price levels.



To read the full report, please LOGIN to www.dbsvonline.com and follow the
steps below:-
1. Click on Quotes and Research
2. Select Reports


To learn DBSVOClarity or any web features, please feel free to call me
directly at (65) 6398 7579/93666746.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Market Outlook Seminar 2013, Tues 15 January, 7:00pm – 9:30pm
Hear from Yeo Kee Yan, our Singapore Retail Market Strategist, as he shares
his views on what’s in store for investors in 2013. Admission fees are $10
per person. Visit www.dbsvickers.com/seminars to register.

wow how do you get research reports sent to your email inbox directly?

would be interested to sign up for this feature if Vickers has it.

It depends on what type of investor you are. This certainly does not fit the 'criteria' of a value investor which is what VB is about in the first place..

We all agree that this is an LBO so leverage will understandably be high. But how high is ok? It does not mean that a snake that is capable of swallowing a hippopotamus in USA cannot do the same in Asia. This seems to be the consensus here. So while it seems like it takes 100 years to to repay the debt, the company has proved to have done pretty okay managing its cash flows and reducing its debt to about 5x EBITDA. This is not bad considering it has only been two quarters since the mammoth acquisition. If the company continues to do what it is doing, in reality, I do not see how it will take 100 years to pay back the debt. Debt to EBITDA and debt to capital ratio are better metrics analyzing such a transaction.

We cannot simply follow broker's buy or sell calls because, simply put, for compliance or strategy reasons, the institutions need to take a position either for itself or for its clients.

And yes, I am rather pleased with their latest results.

The company is my LBO case study. Let's discuss further

IMO, we should consider both, the relative size of debt, and the service-ability of the debt by the combined entity.

Is the net gearing of 5x large to the LBO? The gearing info is misleading. In FY2015, the total debt reduced by only 7-8%, but gearing improved from 7x to 5x. I don't know the optimum gearing for an LBO, but net gearing of 5x, should be on high side. I did a simple check, only less than 20 SGX companies with net gearing > 500%.

Next, is the service-ability of the debt. A few related ratios
EBITDA/Interest Expense = 1x
Net debt / EBITDA = 18x
(EBITDA = US$95.7mil, Net Debt = US$1683 mil, and Interest Expense = US$95 mil)

Current debt / Total Debt = 26%

The combined entity's EBITDA, can only pay annual interest expense, and needs 18 years to pay-off the debt in principal. Current Debt is 26% of total debt, means near term refinancing might be expected.

All comments are welcomed.

(not vested)

EBITDA can only cover interest expense means debt is not going to be repaid. Hence debt over EBITDA is just a ratio and meaningless. Unless they can swap debt for equity and cut capex it will be brinkmanship for some time, until biz improves

(23-09-2014, 04:01 PM)specuvestor Wrote: This is an LBO. Group EBITDA of US$21.5m can't even cover interest expense of US$23.9m is indeed worrisome with cash of just US$28.5m. Cash call have to come sooner rather than later.

just looking at delmonte latest data, it doesnt looks good
negative profit, total liabilites/ equity of 7 times, whether the merger will be a success is anybody guess, the chances of a fail synergy in any merger is so high from historical data, some more this is a cross continental merger, I dont think it is a piece of cake

but that doesnt mean, it will not work, takes HSBC, being there for last 175 years, the debt to equity is 13.2,( even much higher), DBS, is 10.7 times, i dont see anyone saying these are shaky institute, of course if singaporean start defaulting on their mortgages, we will say DBS is risky

as the DBS report have mentioned, delmonte is going to make $52 million after interest payment next year, and growing, let us give it benefit of doubt, and looks at what it means, using current price of 0.415

P/E of 15.3
P/B of 1.8
debt/equity of 7
low dividend for years to come, as lot of debt pending,

these figures dont look particular attractive to me, any mistakes in their execution, bad crops, drop in food price, bad weather, increase in interest rates, will definitely send the company in distress, as the company doesnt have much cash to handle any unexpected contingency

at best scenario, the valuations doesn't look too good, with so much uncertainty, I am quite sure when the analyst project those earning in the report, they only consider the positive scenario, but ignore those bad scenario