Megan: Part X

For quick reference, past postings..

• Megan
  Megan: Part II
  Megan: Part III
  Megan: Part IV
  Megan: Part V
  Megan: Part VI
  Megan: Part VII
  Megan: Part VIII
  Megan: Part IX

Megan announced its quarterly earnings today.

Let's take a look at what's posted in Part IX

Megan's latest numbers and new commens will be in PURPLE font.

~~~~~~~~~~~~~~~~~
Time to look at Megan Media Holdings again.. :D

Here's a good exercise. Remember all the concerns I mumbled about? Since Megan Media will be reporting their earnings this month, let's list all of them concerns again so that when Megan Media reports its earnings, we can see clearly if Megan's situation improved or not...

1. Declining Net Profits.

Here is the most recent 7 quarterly earnings. Read from left to right with the last being the latest. The worry was the clear decline in earnings.

• 12.7 mil, 14.3 mil, 15.1 mil, 15.64 mil, 21.1 mil, 12.9 mil, 3.9 mil, 19.837 mil

* ps... what's your expectations? :D

how? tremendous improvement wor... is this the turnaround one is waiting and HOPING for?

2. Declining Net Profit Margins.

The last 4 quarters net profit margins.. and clearly the concern was the drastic slump in profit margins!

• 7%, 8%, 5%, 3%, 9% ... good improvement wor... so far so good!!!!!... hmmmm.....

3. In Part VIII , the balance sheet concern...

Inventories.............................................. 73,543 102.462
Trade receivables..................................... 333,357 326.950
Other receivables,deposits & prepayments......18,505
Fixed deposits with licensed banks............... 3,589 1.096
Cash and bank balances.............................. 93,998 53.274 Where is Ze Moola???
Tax recoverable........................................ 410
Total...................................................... 523,402

The above was the snapshot of Megan's Current Assets in their last earnings report.

how???????? still good?

The concern was on ...

a) Trade receivables: 333.357 million. total now 326.950 million
b)Inventories: 73.543 million. total now 102.462 million (drastic worry?)

As mentioned and explained in that posting.. the trade receivables were soaring and so were the inventory levels.

Would we see any improvement? And how much improvement do we want to see?

And last but not least the debts issue.

Total borrowings for Megan now stands at 725.151 million. Would we see some decline in Megan's borrowings or would we see Megan borrowings increase yet again? emm... debts now is 750.191 million!!! Fiyoh!!! debts still INCREASING!!!

How?

If there is no drastic improvement or if all these concerns still continue to worsen... what's the most commonsense thing to do?

But then... again... commonsense would have told one to sell this stock years ago!

how?

here is some commentary from Megan itself...

• Thursday, 30 March, 2006
  
  Megan Media Holdings Berhad and its subsidiaries ("Megan" or "the Group") had on 30 March 2006 released its third quarter results to the Bursa Malaysia Securities Berhad.
  
  The Group registered sales of RM214.9 million for the quarter ended 31 January 2006 and profit before tax of RM26.6 million.
  
  Third Quarter 2006 versus Third Quarter 2005
  
  Revenue increased marginally by RM2.9 million or 1.4% from RM212.0 million in the corresponding period of the preceding year to RM214.9 million. EBITDA increased by RM6.7 million and EBITDA margin increased by 2.8% respectively driven primarily by higher sales and production capacity of Digital Versatile Disc-Recordables (DVD-R) and increased in sales of Compact Disc-Recordables (CD-R).
  
  Pre-tax margin improved from 7.3% to 12.4% mainly due to lower depreciation expenses which was partially offset by higher financing costs. During the quarter, the Group has changed the depreciation rate of some of its assets from 20% to 10% per annum to better reflect the useful life of the assets.
  
  Third Quarter 2006 versus Second Quarter 2006
  
  Revenue recorded for the quarter was lower, RM214.9 million as compared with the previous quarter of RM248.3 million. The slide in revenue was mainly due to lower sales of outsourced products for the quarter, which then provided the Group with an improved EBITDA margin of 1.7% from 25.5% to 27.2%.
  
  Megan posted a higher operating and net profit of RM40.4 million and 19.8 million as compared with RM20.4 million and RM4.0 million respectively for the previous quarter.
  
  Business Outlook
  
  The outlook for optical storage products mainly DVD-R looks promising as global demand for DVD hardware (mainly DVD burners) is expected to grow by 50% in 2006, mainly due to a drop in prices of hardware. As a result, the 2006 global demand for DVD+R/-R discs is expected to increase to around 6.0 billion discs. Furthermore, cost pressure is expected to ease since recent development indicates that prices of polycarbonate are reducing from a high of USD3.40 per kg to USD2.90 per kg.

What's your vedict?

Comeon... share your comments.... :)

   Megan Media Holdings Bhd (7101.KU) - Malaysia
   3rd quarter ended Jan. 31:
   Figures are in Ringgit (MYR).
                                 2006               2005
Revenue                MYR214,936,000     MYR211,989,000
Pretax Profit              26,649,000         15,551,000
Net Profit                 19,837,000         15,642,000
Earnings Per Share           9.69 Sen          10.93 Sen
Dividend                      Omitted            Omitted
   9 months ended Jan. 31:
Revenue                   712,118,000        637,094,000
Pretax Profit              53,852,000         53,475,000
Net Profit                 36,763,000         45,060,000
Earnings Per Share          17.96 Sen          31.48 Sen
Dividend                      Omitted           1.50 Sen