Lion Diversified Has Now Got Much More Earnings but.....

Lion Diversified announced its earnings tonight. The numbers looked good but I am truly baffled.

Firstly, let's go back in time. May 2008, it made the following announcement. Quarterly rpt on consolidated results for the financial period ended 31/3/2008

I will focus on the Segmental earnings.

As you can see no earnings from steel sector.

Three months later, Lion Diversified announced the following set of earnings. Quarterly rpt on consolidated results for the financial period ended 30/6/2008

Let's look at the segmental earnings again.

And then there is some steel earnings. Lion Diversified reported some 60.9 million in revenue and some 18.1 million profits from its steel industries.

However, at that point, I was hardly impressed with what I saw and I made the following comments at Sahamas, http://sahamas.net/forum5/5824-4.html

Here is the link to LionD latest quarterly earnings: Quarterly rpt on consolidated results for the financial period ended 30/6/2008

If I run this same exercise as mentioned back in May 2008..

1. Cash balances is now 215.439 million. (lots of money)

2. Total debts is now 864.774 million (lots of debts too! )

Compare this to the earnings report in Feb 2008. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

1. Cash balances was 316.972 million. (less money yes? In a period of 6 months, Lion Diversified cash shrunk by 316.972 - 215.439 = 101.533 million)

2. Total debts was 447.787 million. ( Debts exploded by 864.774 - 447.787 = 416.987 million!!!!!! )

WOW! Cash shrunk by 101.533 million. Debts exploded by 416.987 million.

Now let's look at Lion Diversified earnings reported tonight.

The steel sector revenue jumped from 60.9 million a quarter ago to 373.757 million and profit from the steel sector jumped to 101.859.

Now that's a shocker for me!

And due to this sudden surge in steel earnings, Lion Diversified earnings for the quarter is a whopping 63.094 million! (compare to losses of 4.254 million a quarter ago!)

It's like how did it became so good suddenly? I am baffled.

Anyway, let's look at how it's balance sheet is looking after this much better set of earnings.

1. Cash balances is now 176.745 (compare to 215.439 million a quarter ago).

2. Total debts is now 986.542 million (compare to 864.774 million a quarter ago!!)

3. Trade receivables is now 511.587 million (compare to 392.027 million a quarter ago!!!)

How?

Lion Diversified has now got much more reported earnings but.....