News On Titan Chemicals Earnings Performance

What good is sales without profit?

What good is talking about sales revenue growth when your profits are declining?
These are rather elementary issues, yes?

It was a shocker to read the following article: Titan 9-month revenue up 32pc

Yes, boldly highlighted was Titan 9-month revenue up 32pc and that what was even more amazing that they even have a huge colored chart of Titan Chemical's sales revenue performance!

And how did Titan actually performed? Rather shockingly poor! It's a stinker!

A net profit of only 9.671 million!!!!!!!!!!! Last year same period, it made 74.710 million.

And the previous quarter, Titan made over 116 million!!!!!!! ( See Quarterly rpt on consolidated results for the financial period ended 30/6/2008 )

Hence Titan's earnings last night was TERRIBLY POOR!

On Star Biz, Titan third quarter net profit drops on inventory write-down

• Titan third quarter net profit drops on inventory write-down
  
  PETALING JAYA: Titan Chemicals Corp Bhd’s net profit shrunk to RM9.67mil for the third quarter ended Sept 30 against RM74.7mil in the previous corresponding period.
  
  The drop was attributed to inventory write-down of RM124.7mil by the company on falling feedstock and end-product prices during the quarter under review.
  
  “With limited visibility on global economic growth and wavering levels of business confidence, industry producers and downstream manufacturers were understandably more cautious and conservative.
  
  “Hence demand weakened and prices fell between July and September,’’ managing director Warren Wilder said in a statement yesterday. Turnover for Q3 increased to RM2.05bil from RM1.56bil, as higher sales prices offset lower sales volume.

Which is why I cannot comprehend what Business Times is writing here: Titan 9-month revenue up 32pc. Here is the article in full.

• Titan 9-month revenue up 32pc
  
  By Sharen KaurPublished: 2008/11/05
  
  Titan Chemicals Corp Bhd (5103) reported a 32 per cent surge in revenue to RM5.8 billion for the nine months to September 30 2008 on higher average selling prices.
  
  The net profit of Malaysia's biggest petrochemical firm, however, slid 26 per cent to RM216.5 million, largely because of lower earnings in the third quarter.
  
  Third quarter net profit fell 92 per cent to RM9.9 million from RM119.2 million in the same period last year.
  
  This was attributed to margin squeeze and writedown of inventories to net realisable value amounting to RM124.7 million in the third quarter, caused by plunging prices of oil and its derivatives, including feedstock and end-products.
  
  Titan, which makes olefins and polyolefins for the plastics industry and uses naphtha - a petroleum by-product - as raw material, said the average industry weekly prices for naphtha and polymers had moved downwards as global economic uncertainties seeped in.
  In a statement yesterday, the main board-listed firm said that group sales in the third quarter declined two per cent to RM2 billion from RM2.1 billion in the preceding quarter.
  
  "The global business environment has turned very challenging. With limited visibility on global economic growth and wavering levels of business confidence, industry products and downstream manufacturers were understandably more cautious and conservative. Hence, demand weakened and prices fell between July and September," Titan managing director Warren Wilder said.
  
  Titan said that demand for polymer products in the last quarter of 2008 was expected to be affected by the possible global recession, but believed the impact would be partially mitigated by the seasonal demand towards the end of the year.
  
  "Our diversification into higher manufacturing capacity for polypropylene production is part of our long-term strategy in product positioning," Wilder said.
  
  Titan has completed a plan to solve the bottleneck at its polypropylene plant, enabling it to increase production significantly.

Don't you think the article head line of Titan's revenue being up 32% is rather so misleading?

And do have a look at this past blog posting: Titan VIII