OilCorp Needs To Explain More On Why It Lost 405 Million!
Sunday, March 28, 2010
So on Saturday's: Oilcorp 4th quarter hit by bad debts
- Saturday March 27, 2010
Oilcorp 4th quarter hit by bad debts
PETALING JAYA: Beleagured Oilcorp Bhd suffered a net loss of RM175.95mil in its fourth quarter ended Dec 31, 2009, which was largely due to allowances for doubtful debts and impairment losses, which totalled RM134.44mil.
The company’s full-year net loss totalled a whopping RM406.56 mil, giving it a loss per share of 185.18 sen per share.
Oilcorp had failed to submit its fourth-quarter results on time, missing the Feb 25 deadline. As a result, Bursa Malaysia had suspended the trading of its shares since March 8.
However, Oilcorp said in its statement yesterday that its shares would resume trading on March 29.
Oilcorp also suffered a lower revenue for its fourth quarter, falling to RM39.86mil from RM84.40mil in the corresonding period last year.
It said this was due to lower revenue from the oil & gas and engineering division.
“ Almost all projects have come to a stand still,” the company said its announcement yesterday.
Basic loss per share stood at 80.14 sen compared with basic earnings per share of 1.32 sen.
Oilcorp’s full-year revenue fell to RM232.76mil from RM346.77mil previously.
Its board of directors also expects the group to complete its proposed restructuring scheme within the year.
Oilcorp, a PN17 affected issuer, had said earlier that the reason for being late in coming up with its fourth quarterly report was a shortage of staff.
The company had said that it wished to submit the report only after its 2009 accounts is audited because it ‘’is uncertain whether there will be any material adjustments required to the accounts by the auditors, which may render the QR not giving a true and fair view if the QR is submitted at this juncture’’.
It was a simple allowance of bad debts and impairment of assets.
Now this is why it's rather to take what's printed in the financial news for granted.
Well for instance, the bigger issue, in my flawed opinion is that perhaps one should address the issue why did these bad debts happened.
Yes, why the need to reclassify their debts as bad debts?
As stated in the posting OilCorp's Fiscal year Losses Explodes To 405 Million!, OilCorp's receivables increased by an insane 274 million in 2 years. Why?
Was the company financially sound to allow their receivables to soar so insanely?
In the posting Regarding The Plunge Of OilCorp Shares Today! back in 2008, OilCorp was rather weak. As per its earnings notes and highlighted in the above posting:
Trade and other payables.... 254,851
Short term borrowings......... 216,305
Well that's what they owe 'others'. A cool 659 million!
.. fixed deposit if 26.725 million and cash balances of 3.477 million.
That's not a lot compared to what is being owed by them and most worrying is the 498.257 million in trade receivables!!!!
And the point was the receivables increased by an insane 274 million in just 2 years!
How?
In my flawed opinion, for OilCorp to announce that it is making provision for doubtful debts is not enough. It does not justify what has happened. All I want to know is why and how those receivables increased by an insane 274 million in just 2 years!
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