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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.
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.