Ramunia Fabrication Yard Deal With Oilcorp

On the Edge Financial: One day too late for Oilcorp?

• .... According to a filing with Bursa by Ramunia, Oilcorp’s 51% indirectly owned subisidiary Oilfab Sdn Bhd had accepted a letter of offer from Ramunia to acquire its Pulau Indah fabrication yard assets located on it for RM83.8 million on Jan 25.
  
  According to Ramunia, RM80 million of the purchase price would be satisfied via the issuance of 156.86 million new Ramunia shares to Oilfab at an issue price of 51 sen each while RM3.8 million would be paid for in cash.
  
  What is interesting about the deal is that Oilcorp was also delisted from Bursa on the same day. This certainly raised questions on the timing of the deal. Could the deal have saved Oilcorp from delisting had it sold the asset earlier?

And since it's now delisted... what will happen to this money?????

Such a huge asset sale... the timing of it ... yeah.. could the deal save OilCorp from being delisted?

• ... The acquisition may be a boon for Ramunia which found itself without a core business when it sold off its fabrication yard in Teluk Ramunia for RM515 million cash to Sime Darby Bhd last year.
  
  It was cash-rich after the disposal and was on the lookout to acquire other yards.
  
  Ramunia recently confirmed that it is in talks to acquire Syarikat Borcos Shipping Sdn Bhd which has a common shareholder in pilgrim fund Lembaga Tabung Haji (LTH). LTH holds 84% and 25.17% stakes in Borcos and Ramunia respectively.
  
  It has also signed a deal with Pleasant Engineering Sdn Bhd to utilise the latter’s yard, and expects to commence operations at the Pulau Indah fabrication yard next month via a tenancy agreement with Oilcorp.
  
  For FY10 ended Oct 31, Ramunia posted a net profit of RM65.79 million from RM34.86 million in revenue. For FY09, it had suffered a net loss of RM52.72 million on the back of RM296.67 million in revenue.
  
  Its cash and bank balances stood at RM27.8 million with an additional RM103.75 million in short terms deposits, and no bank borrowings.

Yeah... I also find the chain of events to be truly remarkable.

Ramunia... used to own a fabrication yard. ( Could someone tell me why they sold to Sime Darby? :P ). So it has zero business left. And what does Ramunia do? Buy back a smaller fabrication yard?

I am confused.

So confused.

:P

Read more...

OilCorp: No Audited Accounts Due To Shortage Of Staff

This is NOT an earth shattering news clip but it is seriously disturbing to read such state of affairs in one of our listed companies. ( Hmm.. hope this is not one of the QUALITY stocks listed in the exchange!)

• Oilcorp fails to submit annual statements
  Written by Loong Tse Min
  Thursday, 15 April 2010 22:41
  
  KUALA LUMPUR: OILCORP BHD will be unable to issue its annual audited financial statements for the financial year ended Dec 31, 2009 (FY09) by the stipulated deadline on April 30, 2010, the company said on Thursday, April 15.
  
  In a statement on Thursday, the PN 17-affected issuer said it had on the same day asked for an extension from the stock exchange to file the financial statements by July 31, 2010.
  
  Among the reasons for the delay, Oilcorp said its negotiations with lenders as well as its unfinalised regularisation plan were expected to affect accounting issues and treatments, and as such, its directors felt that it would be appropriate to submit the audited accounts after "having the conceptual regularisation plan finalised".
  
  The company said it had been faced with a shortage of staff as a majority of them had left and rehiring was made difficult with its cash flow constraints, while the group's current state made it difficult to attract new applicants.
  
  Oilcorp said it was also engaging a professional firm of valuers to determine the valuation of the group's assets to assess impairment, the results of which would be made available by end-April.

Well? Is this acceptable or not?

What's the "having the conceptual regularisation plan finalised" got to do with audited accounts?

Shortage of staff issue? Majority of them had left and rehiring was made difficult with its cash flow constraints?

Is that a valid excuse? In the posting OilCorp's Fiscal year Losses Explodes To 405 Million! and OilCorp Needs To Explain More On Why It Lost 405 Million!, I have loaded a snap shot of OilCorp's balance sheet. See this

There is money in there yes? So what is this "rehiring was made difficult with its cash flow constraints" OilCorp is talking about? Why nobody wants to do their accounts? Why has the majority of the staff left?

Totally shocking, really!

Oilcorp said it was also engaging a professional firm of valuers to determine the valuation of the group's assets to assess impairment..

So what is wrong with the previous valuers? Weren't they not valuers? So what is this about engaging a PROFESSIONAL firm of valuers? Are OilCorp saying that the previous valuers are not professional enough?

Good grief!

Read more...

OilCorp Needs To Explain More On Why It Lost 405 Million!

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’’.

Now this doesn't sound so bad yes? The article doesn't portray OilCorp to be a rather poor company.

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:

• Long term borrowings......... 187,934
  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!

Read more...

OilCorp's Fiscal year Losses Explodes To 405 Million!

The issue with OilCorp was so glaring.

The growth in the trade receivables was astronomical. My initial posting on OilCorp was in 2007, when I wrote, OilCorp and OilCorp II

Quote:

• And yes OilCorp share has been rising.
  All I can say is do not confuse a lousy share with a bull market!
  In a hot market any share does stand a possibility of rising.
  However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!

In the first posting OilCorp (written in July 2007), if you scroll right to the bottom and open the quarterly earnings link, Quarterly rpt on consolidated results for the financial period ended 31/3/2007, look at the trade receivables then. It was 336.107 million. The previous year was 284 million.

A year later, Dec 2008, I wrote the following OilCorp and Its Trade Receivables. OilCorp's trade receivables has now exploded to 498.257 million back in 2008.

I asked back then..

• 'Two' fiscal years ago or 8 quarters ago, OilCorp's trade receivables were at 224 million.
  It's receivables this very day is at 498 million.
  An increase of some 274 million!!

Exactly!

That was the the problem.

OilCorp announced its earnings today. It lost a whopping 175 million for the quarter! Which meant that its annual losses was a shocking 405 million!!!!!!!!!!!!!!

I was eager to see its balance sheet and look at the receivables amount. I was pretty darn sure that provision of bad debts had to be made in regards to its receivables.

Receivables is now only 82.188 million!

OMIGOSH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You can see the previous year same quarter total in the next column. It was only 474 million.

Well as they said... do the math!!!!!!!!!!!!!!!!

That was all I needed to see.

This morning I noted on the Business Times:

• Bursa eyes bigger retail growth
  The chief of Malaysia's stock exchange wants to see certain regulatory constraints removed to help improve retail participation in stock trading.

Why doesn't the Chief Of Malaysia stock exchange understand a very basic issue.

If the wants a bigger retail participation something drastic needed to be done with companies like OilCorp being listed in the stock exchange. Yeah, stop wishing and start cleaning and getting rid of them bad apples listed in the stock exchange.

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OilCorp Cannot Publish Its Earnings Due To Staff Shortage!

Totally shocking, really!

I just cannot believe what I am reading here.

• OILCORP Bhd said it would not be able to publish its unaudited fourth quarter results on time, which is due by February 25, because of a shortage of staff.
  
  Its request for more time was rejected by Bursa Malaysia and its shares will be suspended from trading on March 8.
  
  It will only be able to release its quarterly results after the full year numbers are audited.
  
  It expects to issue the audited full year numbers and the outstanding fourth quarter results on April 30, it said in a statement to Bursa Malaysia.

Just totally unreal!

Here we have, a public listed company, telling everyone it cannot publish its earnings due to shortage of staff!!!!!!!!

OMIGOSH!

Surely they could have come out with a much better excuse than this.

Are they (OilCorp) attempting to turn Bursa Malaysia into a circus with excuses like this? I guess the threat of having their shares suspended by Bursa Malaysia matters not for this company!

Now this is one stock that I had blogged many times before.

1. 17th July 2007: OilCorp

OilCorp was listed via a RTO of Abrar Corp back in 2003. And its early years, OilCorp was rather aggressive in the local media. Always giving rather optmistic outlook. They once even told the press that they were bidding rm 1 billion worth of contracts! Yeah, as some would say, talk is always cheap. Then came the bombshell on March 2005: PRESS RELEASE ISSUED BY SECURITIES COMMISSION

OilCorp was ordered to re-state its fiscal 2003 year earnings. How ironic. OilCorp was also listed in 2003. As Errol Oh of the Star said:

• If the extraordinary items were reclassified, Oilcorp's operating profit of RM20.9mil for 2003 would become an operating loss.

Couple of months later, it struck 'gold' and the shares soared when it announced its fishery offer: Offer to Lead the Formation of the Konsortium Perikanan Nasional Berhad (''KPNB'') by the Ministry of Agriculture and Agro-Based Industry (''MOA'')

2. 20th July 2007: OilCorp II

OilCorp - the stock became hot. It started talking about listing its property arm in London AIM!

I, of course, was not impressed.

• Will OilCorp property arm be able to list on AIM next year? I have no idea but that's OilCorp's aim and yes it's always great to have a goal in each company but as it is, this property arm of theirs simply does not have a good track record, yes?
  
  And yes OilCorp share has been rising.
  
  All I can say is do not confuse a lousy share with a bull market!
  
  In a hot market any share does stand a possibility of rising.
  
  However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!

Here's an update! Feb 13th 2010.

• Saturday February 13, 2010
  
  Oilcorp cancels unit’s London listing proposal
  
  PETALING JAYA: Oilcorp Bhd has resolved to abort the earlier proposed listing of its property division, the company said in a filing with Bursa Malaysia yesterday.
  
  It had earlier planned to list its wholly-owned subsidiary, D’Tiara Corp Sdn Bhd, on the alternative investment market of the London Stock Exchange.

As expected, the listing proposal made in 2007, is now cancelled!

Rather shambolic, yes?

3. 26th July 2007: OilCorp III

I explained why the postings were made.

• Full agree with what you are saying here. The reason why I blogged about OilCorp was because there were a series of postings attempting to promote this stock at Sahamas. ( See this forum posting thread here at Sahamas: Oilcorp. ) I find it truly incredible for they were attempting to suggest OilCorp as a good buy based on fundamental reasoning. I was appalled because the events that surrounded OilCorp since its listing was incredible.
  
  In the first blog posting, OilCorp, from day one, there was the 'talk was simply cheap because supply is more than demand' syndrome. Huge boasts of billion dollar oil projects was suggested from the company since 2004. Till today, where's the projects?

4. 10 December 2008: Regarding The Plunge Of OilCorp Shares Today!

• OilCorp (3697.KU) hits limit down threshold, down 38.5% to 48 sen on requotation; stock suspended since May 20 pending reaudit of company's accounts for 2008 after discovery of discrepancies. Clarifies audited group PATAMI for FY07 is MYR3.975 million vs unaudited result of MYR15.41 million. Deviation of more than 10% between the two figures attributed to adjustments made to various costs and "adjusting events." Oilcorp also submitted yesterday 2007 annual report and quarterly results up to period ended Sept. 30, 2008. For 9-month period ended Sept 30, Oilcorp posted loss of MYR2.3 million from MYR262.4 million in revenue vs revised net profit of MYR11.9 million from revenue of MYR277.1 million in previous year. "The selldown is not surprising. Investors are just looking to conserve whatever cash they can. There's just way too much selling pressure after so many months of suspension," says dealer

Back in 2005, there were already issues with OilCorp's accounts. It happened again 2008!

Unreal, isn't it?

And what was most glaring for me was the 498.257 million in trade receivables!!!!

Yup, again the trade receivables issue!

5. 11 December 2008: OilCorp and Its Trade Receivables

I explained why I thought the receivables were an issue for me. Of course, I could be wrong.

Of course, I made a rather nasty prediction in that posting.

• And if you are interested, this stock even tried to do the nonsensical 1 for 10 stock split when the stock was trading at 1.30 (see forum posting: here at sahamas )
  Well now the stock is now around 40 sen.
  Pretty soon it 'might' get its wishes to trade around 13 sen!
  LOL!
  Ok, that was nasty on my behalf!

6. 24th Sep 2009: And OilCorp Comes Crashing Down Once More!

• PETALING JAYA: Spooked by the spectre of Oilcorp Bhd slipping into Practice Note 17 (PN17) status, investors sold down the stock yesterday, loping as much as 20% off the share price before the counter closed at 26.5 sen, a fall of 5 sen or 15%.
  
  Last Friday, Oilcorp said it had failed to make an interest payment of RM1.6mil because it did not have sufficient funds due to the delay in collecting certain large receivables.

The warning about the recivables came true! OilCorp starts defualting on interest payments!

7. 26th Sep 2009, a summary of OilCorp is posted again: Regarding Oilcorp

8. 17th Oct 2009. How Much Do You Really Care About OUR Stock Market?

• mydreamgetgold: Since our Securities Commission, the Star and NST are all sleeping, Malaysia Today should run a report of possible insider trading by Oilcorp Bhd directors. Recently, Oilcorp was slapped with the PN17 status and its shares tumbled. But before the announcement, its directors had been selling off their holdings relentlessly. Isn't that clear indication of insider trading? Look at the declaration published by Bursa.

The directors HAD BEEN SELLING OFF THEIR HOLDINGS RELENTLESSY!

HOW?

9. 31 oCT 2009: Another Default In Payment By OilCorp

.............................

It's now 2010. And OilCorp is telling Bursa Malaysia it cannot publish its earnings due to staff shortage!

Another proud day!

Sigh!

ps: OilCorp last traded at 9 sen!!

Read more...

Another Default In Payment By OilCorp

Saw this announcement on Bursa website.

• The Company had on 18 September 2009 announced that the Company has failed to meet its interest payment of RM1,643,806.85 due and payable on 17 September 2009 in respect of the Facility Agreement dated 9 September 2005 between EON Bank Berhad, CAPONE Berhad and OILCORP under a Primary Collateralised Loan Obligation (“CLO”) Transaction (“Facility”).
  
  The Company had on 29 October 2009 received a letter notifying a Declaration of Default under the Facility and the outstanding amount demanded under the Facility to be immediately due and payable as at 27 October 2009 are as stated in the said letter as follows:-
  
  Principal sum RM45,000,000.00
  
  Interest RM 1,951,471.23
  
  Default Interest RM 487,072.60
  
  Total RM47,438,543.83
  
  Should the Company fail to pay these amounts within fourteen (14) days, CAPONE Berhad may commence legal action against the Company for the recovery of the same.
  
  
  The Company is seeking legal advice on the matter.

Blogged previously: Regarding Oilcorp

And again the point to remember is that the major shareholders HAD sold down their shares ahead of 'these bad news'.

Oilcorp then (when I blogged Regarding Oilcorp) was 17.5 sen.

Oilcorp last traded at 11.5 sen.

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How Much Do You Really Care About OUR Stock Market?

Posted on the chatbox.

• mydreamgetgold: Since our Securities Commission, the Star and NST are all sleeping, Malaysia Today should run a report of possible insider trading by Oilcorp Bhd directors. Recently, Oilcorp was slapped with the PN17 status and its shares tumbled. But before the announcement, its directors had been selling off their holdings relentlessly. Isn't that clear indication of insider trading? Look at the declaration published by Bursa.

Good point Dream!

Problem is... how many of Malaysian stock market 'players' (investors & traders & punters) really care?

Yes!

How much do YOU really care?

And when it comes to OPPORTUNITIES to make money in the market, people tend to forget what had happened before.

Most important is NOW!

How much can I make now?

No one makes money from past history!

Most important is what the stock will do NOW and the NEXT TRADED minute.

Take iCapital. Who will remember what they did early last year? Who will remember? Who cares?

Do you care at all?

Read more...

Regarding Oilcorp

Blogged previously. And OilCorp Comes Crashing Down Once More!

Well Oilcorp really crashed!

What now?

If I am stuck at this stock, perhaps it's best to reevaluate my current position. Yes? That would be the logical thing to do yes?

Here are some main issues for me to consider.

1. What has OilCorp done lately?

Well, time to dig up some past.

June 2006. A step forward for Oilcorp in fisheries

• MOVING from oil and gas to fishing may seem a step backward for some, but for Oilcorp Bhd, the latter seems to hold more promise than what many people believe.
  
  The company sees revenue contribution from deep-sea fishing activity reaching in excess of RM300mil in five years, which would be far greater than what its current other core businesses, oil and gas (O&G) and property, would generate. Its O&G division is projected to earn RM200mil in revenue and its three property projects RM60mil.

Oil company going into deep-sea fishing????

Feb 2007. Oilcorp decides to do a 1 into 10 stock split!

What's the problem with such an exercise? Well, how much was Oilcorp trading back on Feb 2007? Around 1.10. And Oilcorp wanted to split every stock into 10! What's the rational? What's the point of such exercise? How does it reflect on the management? (This split was not implemented)

Apr 2007.

• Monday April 9, 2007
  
  Oilcorp unit sees new RM1b contracts
  
  By YVONNE TAN
  
  PETALING JAYA: Oilcorp Bhd subsidiary Oilfab Sdn Bhd expects to clinch RM1bil in new projects by 2009, given the industry’s bright prospects, its chief executive officer and managing director Mohamed Hazali Abu Hassan said.
  
  “In the current environment, we are convinced of being able to continue reaping more profits and opportunities as more offshore developments emerge,” he told StarBiz...

June 2007.

• Saturday June 30, 2007
  
  Oilcorp confident of RM1.73bil Mideast contract
  
  PETALING JAYA: Oilcorp Bhd is confident of securing a US$500mil (RM1.73bil) oil and gas contract in the Middle East, group managing director Sunny Ng Huat Tian said.
  
  “Chances of winning the project are very good,” he said after the company AGM... here

Aug 2007.

• 07-08-2007: Oilcorp wins RM290m fabrication job bby Woon Wu Lin
  
  KUALA LUMPUR: Oilcorp Bhd has secured its largest ever fabrication contract to the tune of RM290 million from Petronas Carigali–PTTEPI Operating Company (CPOC). Following this, Oilcorp officials alluded to the possibility of the group and other fabricators standing to benefit from other multi-billion contracts from Carigali and its umbrella contractors over the next five years...

Aug 2007

• Oilcorp sees RM135m from sale of hotel in KL
  
  By Chong Jin Hun
  jinhun@nstp.com.my
  
  August 15 2007
  
  OILCORP Bhd stands to generate at least RM135 million from sale of its upcoming hotel in Kuala Lumpur, the second of its four planned hospitality units comprising some 3,000 rooms it hopes to build in Malaysia in the near term.
  
  Oilcorp executive director Pua Yow Liang said the 375 rooms in the 33-storey hotel in Kuala Lumpur could be sold for between RM360,000 and RM600,000 each. The developer will, in turn, lease back and manage the properties....

Aug 2007.

• Wednesday August 15, 2007
  
  Oilcorp plans to launch three property projects worth RM1.2b
  
  KUALA LUMPUR: Oilcorp Bhd, an integrated holding company, aims to launch three new property development projects with a gross development value (GDV) of about RM1.2bil over the next four to five years.
  
  Executive director Pua Yow Liang said yesterday the projects were at KL Sentral, Genting and Pulau Indah....

Sep 2007.

• Tuesday September 18, 2007
  
  Oilcorp to list property and resort arm
  
  KUALA LUMPUR: Oilcorp Bhd's property and resort management arm, D'Tiara Corp Sdn Bhd, is en route to listing on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE).
  
  Oilcorp said in a statement yesterday it had appointed international financial services firm Libertas Capital Group plc adviser for the flotation.
  
  D'Tiara is involved in property development, resort operation and property investment. It owns and manages the D'Tiara Beach Resort in Port Dickson....

Jan 2008

• Friday January 4, 2008
  
  Oilcorp O&G division to clinch more contracts
  
  PETALING JAYA: Oilcorp Bhd expects its oil and gas division to clinch more projects in the next three to six months.
  
  Petroliam Nasional Bhd (Petronas) is anticipated to award about RM10bil worth of new projects in the next three years to a handful of qualified fabricators, according to Oilcorp group managing director Sunny Ng.
  
  As of August last year, the six licensed Petronas fabricators were Oilfab Sdn Bhd, Brooke Dockyard & Engineering Works Corp, HL Engineering Sdn Bhd, Malaysian Marine Heavy Engineering Sdn Bhd, Ramunia Fabricators Sdn Bhd and Sime Darby Engineering Sdn Bhd, he said after Oilcorp's EGM yesterday..

So much promises. Let's take a look at how Oilcorp performed as per its own earnings announcement back in Feb 2008. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

It made some 3.5 million ringgit but pales in comparison to its last fiscal year earnings, same quarter, earnings of 6.6 million. And this comes on the back of a surging sales revenue! Sales revenue for the whole fiscal year was 456 million compared to its previous year revenue of 153 million.

And if you look into the balance sheet, the trade receivables showed that its receivables soared to 553.014 compared to previous year 284.033 million.

Hmm..... on a year-year comparison, sales soared by 303 million, receivables soared by 268 million and net profit only increased by a measly 1.358 million!!!!

Does this sound right? If a company sales increased by a whopping 303 million, why did its net profit only increase so little?

Its cash balances was 62.749 million and it had 328.699 million in loans.

Last year?

Its cash balances were 10.642 million and it had 220.376 million in loans.

Hmm... looks like its cash balances worsen.

So how?

Let me address the earlier question again.

Does this sound right? If a company sales increased by a whopping 303 million, why did its net profit only increase so little? And why did its cash balances worsen so badly despite all massive increase in sales revenue? What's happening here?

21st May 2008. All hell broke loose!

• Oilcorp revising 2007 audited accounts
  
  By Adeline Paul Raj Published: 2008/05/21
  
  The company is in talks with its auditors to resolve a disagreement 'on a long-term contract amounting to RM110 million, inclusive of a variation order of RM20 million'
  
  OILCORP Bhd, an engineering services firm, may cut its 2007 pre-tax profit figure by 68 per cent due to differences with its auditors on the accounting treatment of a contract.
  
  It told the stock exchange yesterday that it would be amending its 2007 annual audited accounts because of a disagreement between the management and the auditors "on a long-term contract amounting to RM110 million, inclusive of a variation order of RM20 million".
  It did not provide details on the contract.
  
  Based on the auditors' proposed accounting treatment, Oilcorp's pre-tax profit would be reduced to RM7 million from RM22 million.
  
  This means that its pre-tax profit for 2007 would have declined by 46 per cent from a year ago instead of rising 69 per cent.
  
  The company is in discussions with its auditors to resolve the disagreement, and expects to take two weeks to come to a resolution.
  
  "Once we resolve this issue with the auditors, we expect to be able to submit the amended (audited accounts) by June 9," Oilcorp said in the statement.
  
  Trading in the main board-listed company's shares was suspended yesterday pending the announcement.
  
  It will continue to be suspended until Oilcorp submits the amended accounts, together with the auditors' and directors' reports, to Bursa Malaysia.
  
  The stock last traded at 78 sen....

How?

Now if one puts into perspective and compared this to all the highly optimistic articles published on the press, how would you evaluate this company?

Look back again at the chain of events. Oil company going big time into deep-sea fishing. Billion dollar contract expectations in oil industry and billion dollar property projects and now dispute in its audited accounts.

Suspect?

And what has happened to Ascentland's listing in AIM?

July 2008.

• Follow order or face penalties, Oilcorp warned
  
  Published: 2008/07/26
  
  THE Securities Commission (SC) has warned Oilcorp Bhd of "civil and criminal penalties" if it fails to comply with an order to let an auditor investigate its books.
  
  This came after Oilcorp appeared to challenge the SC's directive by questioning Baker Tilly Monteiro Heng's (BTMH) appointment by the regulator and invoked the threat of legal action against the auditor...

July 2008. Oilcorp – drilling for truth

• ..... Strip away the bad blood and background noise, and you’ll find allegations and counter-allegations of misconduct, conflicts of interest, and lapses in the performance of duty. If they indeed happened, many of these are punishable offences.
  
  It would be reckless to dismiss these accusations and insinuations without investigations, never mind that some appear to be trivial and diversionary.
  
  This is why it’s great that the Securities Commission (SC), Bursa Malaysia and the Malaysian Institute of Accountants (MIA) have started probing. At this point, only they have the authority and resources to untangle this mess....

31st July 2008.

• 31-07-2008: MARC revises status of Oilcorp notes to negative
  
  Malaysian Rating Corporation Bhd (MARC) has revised its MARCWatch status of its MARC-2ID/A-ID ratings on Oilcorp Bhd’s RM70 million Murabahah Underwritten Notes Issuance Facility/Islamic Medium Term Notes Facility (MUNIF/IMTN) to negative from developing.
  
  The rating agency said it was concerned that a prolonged accounting dispute would affect Oilcorp’s access to capital and may result in disciplinary action by the regulators...

Aug 2008. Unable to name new auditor or no one wants the job???

• 12-08-2008: Oilcorp unable to nominate new auditor
  by Doreen Leong
  
  KUALA LUMPUR: Oilcorp Bhd has not been able to nominate another firm as its statutory external auditor, with the absence of a professional clearance from its previous auditor Baker Tilly Monteiro Heng (BTMH) hanging over the oil and gas services provider.
  
  As such, sources said pursuant to the Companies Act, the Companies Commission of Malaysia (CCM) would have the authority to appoint a new audit firm to act as Oilcorp’s external auditor....

Nov 2008. Still talks of winning billion dollar contracts!

• Oilfab eyes RM1b deals by 2010
  
  By Presenna NambiarPublished: 2008/11/18
  
  Oilfab Sdn Bhd, a subsidiary of Oilcorp Bhd, says it targets to win projects worth RM1 billion by 2010, with more big jobs coming its way.
  
  The completion of work on the extension of its bulkhead (platform in which the topside and jacket is built) and seawall this month will enable it to construct structures of more than 10,000 tonnes, from 2,000 tonnes now.
  
  A seawall is a structure that protects the shoreline against erosion...

4th December 2008. Oilcorp submits new accounts

• ... The value of the project was disputed earlier this year, leading Bursa to order a re-audit of its accounts.
  
  Meanwhile, in its filing with Bursa Malaysia yesterday, Oilcorp said the group’s audited net profit for FY07 was RM4mil compared with its unaudited result of RM15.4mil reported on Feb 29, due to adjustments such as allowance for doubtful debts, deferred tax expenses and professional fees.

Its fy 2007 earnings is now only 4 million?? From reporting an earnings of 15.4 million. it's now restated to just 4 million???? How big of a deviation is this?

December 2008. Converting debts into shares!

• 04-12-2008: Oilcorp exchanges debt for equity, accounts cleared
  by Joyce Goh
  
  KUALA LUMPUR: Oil and gas fabricator Oilcorp Bhd has proposed to covert RM80 million in debts owing by its clients into a 10% equity stake in loss-making Renewable Fuel Corp Inc (RFC). The company’s long-overdue accounts for the financial year ended December 2007 also passed the scrutiny of its auditors and were finally submitted to Bursa Malaysia.
  
  In a statement to Bursa yesterday, Oilcorp said its indirect wholly owned subsidiary, Oilcorp International Limited, had entered into a conditional agreement for the proposed subscription of 2.2 million preferred stocks in RFC to be satisfied by the conversion of debts owed by Plant Biofuels Corporation Sdn Bhd (PBC) and Optimis Tegus Sdn Bhd of RM40 million each.
  
  These debts are due to Oil-Line Engineering & Associates Sdn Bhd (OLEA), a wholly owned subsidiary of Oilcorp.
  
  RFC is involved in the manufacturing and distribution of bio-diesel and blended diesel fuels in the US. It posted a net loss of US$1.7 million for the financial year ended Sept 30, 2008, mainly due to administrative expenses. The company was incorporated in September 2007...

And RFC which was the root of all accounting issues posted a net loss of US$1.7 million.

And Oilcorp does a debt into equity deal with RFC?????

11th December 2008.

• 11-12-2008: Oilcorp shares plunge on resumption of trading
  
  KUALA LUMPUR: Oil and gas fabricator Oilcorp Bhd saw its share price tumble by almost 50% after it resumed trading following its suspension in May this year for failing to submit its audited accounts for the financial year Dec 31, 2007.
  
  The accounts could not be submitted as the management of Oilcorp and its auditors were in disagreement over the contract value of a job secured by the company to build a biofuel plant...

Made two blog postings on that day. Regarding The Plunge Of OilCorp Shares Today! and OilCorp and Its Trade Receivables

Oilcorp share price down 15%

• .... Under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.
  
  Oilcorp also said it did not have a formal regularisation plan at present, but it would shortly appoint a principal adviser to formulate such a plan. It added that it would continue to negotiate with its lenders.
  
  On Friday, it said the interest payment was part of the facility agreement between EON Bank Bhd, Capone Bhd and Oilcorp under a primary collateralised loan obligation (CLO).
  
  “The company had on Sept 15 written to Malaysian Trustees Bhd to seek indulgence of time of up to one month from the due date to remedy the matter,” Oilcorp said, adding that the lender and trustee had yet to declare Oilcorp in default under the facility agreement.
  
  If such declaration of default were made, the CLO would be immediately payable together with the accrued interest, it said, adding that such default would impact business, financial and operations.
  
  Oilcorp expects to resolve the issue if given the indulgence period, as it is pursuing the payment of receivables. The options available to lenders would be to issue legal proceedings against the company.
  
  The company is seeking legal advice as to whether such a default constitutes an event of default under any other loan agreements.
  
  “The directors are unable to form an opinion that the company will be able to meet its debts as they fall due and accordingly the company is not solvent,” Oilcorp said.
  
  Last Friday also saw the resignation of two of the company’s non-executive and independent directors Tuan Raime Unggi and Sim Ti. They are also members of the audit committee. Oilcorp now has only one independent director.
  
  The company, which is involved in oil and gas, special projects, hotel, resort operation and property investment, and deep-sea fishing, is heavily geared with net debt of RM421.8mil as at end-June.
  
  Malaysian Rating Corp Bhd (MARC), in an email reply to StarBiz, said Oilcorp’s liquidity position was very weak and it had limited options to stabilise its credit profile.
  
  Oilcorp had relied on its moving receivables from oil and gas majors as a source of liquidity, it said, adding that the company was unlikely to be able meet its obligations unless it quickened its trade receivables collection, or rely on external support.
  
  The rating house had recently downgraded Oilcorp’s RM70mil Murabahah underwritten notes issuance facility/Islamic medium-term notes facility (Munif/IMTN) to MARC-4ID/BBID from MARC-2ID/A-ID.
  
  Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7.
  
  “MARC has been informed that the sole bondholders of the Munif/IMTN have granted indulgence of up to three months to Jan 7, 2010 in order to meet the sinking fund due on Sept 7 and redemption due in October,” the rating house said.
  
  Oilcorp posted a wider net loss of RM1.5mil for the second quarter ended June 30 versus RM1.02mil in the previous corresponding period, as revenue fell 15% year-on-year to RM69.5mil.
  
  Earlier this month, subsidiary Oilfab Sdn Bhd secured a RM36mil job for Brownfield Retrofit Project from Carigali Hess Operating Co Sdn Bhd.
  
  Oilcorp had previously delayed its 2007 audited accounts due to disagreement between the management and the auditors over the value of a contract. The management, when contacted by StarBiz, declined comment.

MARC's original press statement was published on Business Times.

• MARC downgrades Oilcorp's RM70m Islamic debt
  
  Published: 2009/09/12
  
  MALAYSIAN Rating Corp Bhd (MARC) has downgraded Oilcorp Bhd's RM70 million Islamic debt to "BB" from "A-" due to concerns that it may not be able to settle the debt.
  
  Oilcorp, which is involved in oil and gas engineering, property development and deep sea fishing, has failed to deposit RM10 million into an account on September 7 to repay part of the debt due on October 7.
  
  It needs to pay back RM20 million on that day, MARC said in a statement.
  
  Oilcorp had identified certain receivables, primarily arising from variation orders, to make the September payment.
  
  "However, the group has failed to make any notable progress on collection of its stagnant receivables amounting to RM347.8 million in the first six months of 2009 and its receivables turnover increased to 567 days,"
  
  MARC said Oilcorp has no other sources of potential liquidity apart from outstanding receivables that it may rely on to meet the upcoming obligation.
  
  Nonetheless, Oilcorp has got a time extension to make the sinking fund payment from its sole bondholder.
  
  Oilcorp made an unaudited loss before tax of RM0.5 million for the first half of 2009 on the back of falling revenue.
  
  Net cashflow from operating activities during the period was negative RM20.7 million.
  
  MARC could downgrade the debt further if Oilcorp could not find other sources of repayment closer to the October redemption deadline.

How would one evaluate what Oilcorp has done lately?

Take away all the contract awards, and the accounting issues, what does one have?

Let's look at MARC assessment. Net cashflow for the period was negative rm20.7 million, company not making money, and now, as per Star Biz article, "Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7. "

Oct 7 comes very fast!

How?

2. What about Oilcorp the stock?

As we have seen time and time again, stocks don't usually follow its fundamentals. Stocks do fly without wings, just like Peter Pan!

So for one that is stuck in Oilcorp, perhaps with the current incredible bullish market undertone worldwide, one feels that perhaps Oilcorp could see some sort of bounce, for they argue nothing could go down forever.

Yes, there's a chance that one could see a technical rebound in the stock after falling so drastically.

But then, there's still a chance that Oilcorp could go down much, much more!

Why not?

Because since Oilcorp is now a newly designated PN17 stock, chances are more that Oilcorp could go down much more! (Well here's what one can go. One can dig up all the PN 17 stocks and check their performances during the early stages after being designated as a PN 17 stock. What do you see?)

And it's not easy for one to get out of the PN 17 status.

Companies are designated as a PN 17 stock for a reason and the reason is that the companies are rather extremely poor in its fundamentals. Remember MARC statement, company is in a negative cash flow of 20 million! Company has huge debts due and the company not making money.

Collecting of debts is always possible but let's look at MARC's statement again, "the group has failed to make any notable progress on collection of its stagnant receivables amounting to RM347.8 million in the first six months of 2009 and its receivables turnover increased to 567 days,"

Receivables turnover increased to 567 days!

What kind of receivables are those?

567 days and Oilcorp could not collect.

How do you rate Oilcorp chances of collecting these debts in the near future?

Unable to collect these debts is one thing but the longer it remains un-collected, sooner rather than later, Oilcorp needs to re-classify these debts.

And when it's reclassified, it's BAD DEBTS. And bad debts equates to accounting losses.

Consider this. Oilcorp's current market cap at 17.5 sen is some 38.420 million.

And what is the size of Oilcorp's receivables? Some 489 million!

What if just half of its debts is reclassified as bad debts and into accounting losses? Half would be some 244 million! Which is more than Oilcorp's equity!

How?

Huge mess, yes?

If Oilcorp was not in such a deep mess, surely it would have wanted to be designated as a PN 17 stock, yes?

And remember that under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.

And what if the stock is delisted?

How then? Would you rate your chances betting on this stock?

And given the fact that there are so many other stocks, surely one have to ask, "Why bet on this stock? No other better stocks to bet on?"

3. Any sell down in shares by the major shareholders?

Yes!

Notice of Person Ceasing (29C) - NG HUAT TIAN
Changes in Sub. S-hldr's Int. (29B) - PRAMADDUN HOLDINGS SDN BHD
Notice of Person Ceasing (29C) - GENESIS ACRES SDN BHD

Vote of confidence?

And if one is still a shareholder, how would one feel? The smarter insiders, had already cashed out before the 'bad' news.

4. What to do now?

Is it too late to consider the fact that this is a terrible mistake to 'invest' in Oilcorp?

Consider this statement again from Mr.Soros... "I'm only rich because I know when I'm wrong."

Is it too late to sell?

What if the stock goes below 10 sen?

Yes, one could hold. One could bet that Oilcorp could recover one day.

But when you consider all the issues mentioned so far, how do you rate your chances?

What if Oilcorp do not recover?

What if Oilcorp receivables are classified as bad debts?

What if Oilcorp is delisted?

Read more...

And OilCorp Comes Crashing Down Once More!

Dejavu!

It just an accident waiting to happen!





Oilcorp share price down 15%

• PETALING JAYA: Spooked by the spectre of Oilcorp Bhd slipping into Practice Note 17 (PN17) status, investors sold down the stock yesterday, loping as much as 20% off the share price before the counter closed at 26.5 sen, a fall of 5 sen or 15%.
  
  Last Friday, Oilcorp said it had failed to make an interest payment of RM1.6mil because it did not have sufficient funds due to the delay in collecting certain large receivables.
  
  Trading in the stock was halted the same day and resumed yesterday. Oilcorp was one of most heavily traded counters for the day.
  
  Investors’ fears were confirmed when the company announced after 5pm that it was an affected issuer under PN17 of Bursa Malaysia’s listing requirements because it had defaulted on the interest payment and could not provide Bursa with a solvency declaration.
  Under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.
  
  Oilcorp also said it did not have a formal regularisation plan at present, but it would shortly appoint a principal adviser to formulate such a plan. It added that it would continue to negotiate with its lenders.
  
  On Friday, it said the interest payment was part of the facility agreement between EON Bank Bhd, Capone Bhd and Oilcorp under a primary collateralised loan obligation (CLO).
  
  “The company had on Sept 15 written to Malaysian Trustees Bhd to seek indulgence of time of up to one month from the due date to remedy the matter,” Oilcorp said, adding that the lender and trustee had yet to declare Oilcorp in default under the facility agreement.
  
  If such declaration of default were made, the CLO would be immediately payable together with the accrued interest, it said, adding that such default would impact business, financial and operations.
  
  Oilcorp expects to resolve the issue if given the indulgence period, as it is pursuing the payment of receivables. The options available to lenders would be to issue legal proceedings against the company.
  
  The company is seeking legal advice as to whether such a default constitutes an event of default under any other loan agreements.
  
  “The directors are unable to form an opinion that the company will be able to meet its debts as they fall due and accordingly the company is not solvent,” Oilcorp said.
  
  Last Friday also saw the resignation of two of the company’s non-executive and independent directors Tuan Raime Unggi and Sim Ti. They are also members of the audit committee. Oilcorp now has only one independent director.
  
  The company, which is involved in oil and gas, special projects, hotel, resort operation and property investment, and deep-sea fishing, is heavily geared with net debt of RM421.8mil as at end-June.
  
  Malaysian Rating Corp Bhd (MARC), in an email reply to StarBiz, said Oilcorp’s liquidity position was very weak and it had limited options to stabilise its credit profile.
  
  Oilcorp had relied on its moving receivables from oil and gas majors as a source of liquidity, it said, adding that the company was unlikely to be able meet its obligations unless it quickened its trade receivables collection, or rely on external support.
  
  The rating house had recently downgraded Oilcorp’s RM70mil Murabahah underwritten notes issuance facility/Islamic medium-term notes facility (Munif/IMTN) to MARC-4ID/BBID from MARC-2ID/A-ID.
  
  Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7.
  
  “MARC has been informed that the sole bondholders of the Munif/IMTN have granted indulgence of up to three months to Jan 7, 2010 in order to meet the sinking fund due on Sept 7 and redemption due in October,” the rating house said.
  
  Oilcorp posted a wider net loss of RM1.5mil for the second quarter ended June 30 versus RM1.02mil in the previous corresponding period, as revenue fell 15% year-on-year to RM69.5mil.
  
  Earlier this month, subsidiary Oilfab Sdn Bhd secured a RM36mil job for Brownfield Retrofit Project from Carigali Hess Operating Co Sdn Bhd.
  
  Oilcorp had previously delayed its 2007 audited accounts due to disagreement between the management and the auditors over the value of a contract. The management, when contacted by StarBiz, declined comment.

The mess with Oilcorp was there from day one.

The delay "in collecting certain large receivables"?

Warned last year, OilCorp and Its Trade Receivables.

• If you compare the 498 million in receivables for OilCorp's most recent reported quarterly earnings to the same corresponding period a year ago, OilCorp had 465 million in receivables. An increase of some 33 million in receivables in 'one' fiscal year.
  
  Now look at OilCorp sales revenue. It's only a paltry 76 million and its previous quarter was some 81 million.
  
  Now to have only sales revenue of less than 100 million, don't you think it's rather incredible to have trade receivables amounting to 498 million?
  
  I do think so. Very much in fact.

And worst still the problems with its account had caused its shares to tumble last December too! ( see Regarding The Plunge Of OilCorp Shares Today! )

---------------------

see latest update: Regarding Oilcorp

Read more...

OilCorp and Its Trade Receivables

Received the following comments from Jasonred79 on Regarding The Plunge Of OilCorp Shares Today!

• Dude, let's be more "conservative" and "fair" in judging oilcorp...
  
  Let's give the various scenarios for 10%, 20%, 30% default. (personally, I think you are definitely right about the super high receivables meaning that they will NOT manage to collect most of that money)
  
  Every 10% default means... RM50 million loss. Which is 5 years of earnings if you are kind to them and assign them an average annual profit of RM 10million a year.
  
  (if you assign them an annual loss, they're screwed regardless of anything else)
  
  CURRENT liabilities of 450 million is quite bad!
  Their cash in hand totals RM30 million!
  
  In other words, if they have to pay back 10% of their current liabilities immediately... THEY ARE INSOLVENT!!!
  
  Moo, we don't even need to talk large numbers like 50% default on debts...
  
  A mere 10% (which is a reasonable accounting number) in certain everyday areas, would be enough to wipe them out.
  
  Oh yes... I notice that RM62 million of their asset shiit is "property development costs".
  
  Wonder what happens if they have to write that off over time?

Jason,

Many thanks for your comments.

Here is the snapshot of OilCorp's Receivables again.


If you compare the 498 million in receivables for OilCorp's most recent reported quarterly earnings to the same corresponding period a year ago, OilCorp had 465 million in receivables. An increase of some 33 million in receivables in 'one' fiscal year.

Now look at OilCorp sales revenue. It's only a paltry 76 million and its previous quarter was some 81 million.

Now to have only sales revenue of less than 100 million, don't you think it's rather incredible to have trade receivables amounting to 498 million?

I do think so. Very much in fact.

And if I have to truly valuate this company, I do think to assume that half of these receivables could go bad is but a fair assumption. In fact, I do think it's rather generous.

However, do understand that this is my own personal opinion, which obviously could be flawed, as usual.

Now since the quarterly earnings I looked at was OilCorp 2008 Q3 earnings, let's look for OilCorp 2006 Q3 earnings.

Here it is: Quarterly rpt on consolidated results for the financial period ended 30/9/2006

Look at the size of the sales revenue then. It was only around 56+ million!

Let's think about it for a minute.

Sales of around 56+ million, how could OilCorp's receivables be at some 498+ million?

And this was only some 8 quarters ago!

Ok, now let's open that link: Quarterly rpt on consolidated results for the financial period ended 30/9/2006

Now there you have it.

'Two' fiscal years ago or 8 quarters ago, OilCorp's trade receivables were at 224 million.

It's receivables this very day is at 498 million.

An increase of some 274 million!!

Now in my earlier posting, Regarding The Plunge Of OilCorp Shares Today!, I mentioned the following:

• What if due to 'unknown' circumstances, OilCorp could not collect half, yes just half, of these debt owing to them and needs to write it off as bad debts? (Is this not possible? Check past earnings. If these receivables could be collected, the amount should never be so much! Yes?).
  
  Well half of that 498.257 million is some 249+ million!

Do you still think it's unfair?

Sorry I do not.

And yes I have blogged on this stock before back in 2007: OilCorp

And if you are interested, this stock even tried to do the nonsensical 1 for 10 stock split when the stock was trading at 1.30 (see forum posting: here at sahamas )

Well now the stock is now around 40 sen.

Pretty soon it 'might' get its wishes to trade around 13 sen!

LOL!

Ok, that was nasty on my behalf!

Cheers!

Read more...

Regarding The Plunge Of OilCorp Shares Today!

Quite some chatter over OilCorp today.

Here is a short clip from Dow Jones Newswire.

• OilCorp (3697.KU) hits limit down threshold, down 38.5% to 48 sen on requotation; stock suspended since May 20 pending reaudit of company's accounts for 2008 after discovery of discrepancies. Clarifies audited group PATAMI for FY07 is MYR3.975 million vs unaudited result of MYR15.41 million. Deviation of more than 10% between the two figures attributed to adjustments made to various costs and "adjusting events." Oilcorp also submitted yesterday 2007 annual report and quarterly results up to period ended Sept. 30, 2008. For 9-month period ended Sept 30, Oilcorp posted loss of MYR2.3 million from MYR262.4 million in revenue vs revised net profit of MYR11.9 million from revenue of MYR277.1 million in previous year. "The selldown is not surprising. Investors are just looking to conserve whatever cash they can. There's just way too much selling pressure after so many months of suspension," says dealer

I decided to take a peep.

Just a small tiny weenie peep.

Long term borrowings......... 187,934
Trade and other payables.... 254,851
Short term borrowings......... 216,305

Well that's what they owe 'others'. A cool 659 million!

And what they have to offer is the following...

Ahem.. 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!!!!

The size of it is simply unbelievable!

Look at its share capital. It's only some 219 million!

Think for a moment.

What if due to 'unknown' circumstances, OilCorp could not collect half, yes just half, of these debt owing to them and needs to write it off as bad debts? (Is this not possible? Check past earnings. If these receivables could be collected, the amount should never be so much! Yes?)

Well half of that 498.257 million is some 249+ million!

Which is more than its share capital!!!!!!!!!!!!!

How?

This is totally unreal yes?

And to make it worse, OilCorp 'can' only manage a PAT (profit after tax) Loss of 3.3 million!

How?

And remember as it is, OilCorp owes 'others' some 659 million!!!

And if remember correctly, some local 'experts' called this a 'fundamental' stock!!

Read more...

OilCorp III

My Dearest ToeBear,

• Well said on the last sentence...I don't think fundamentally anyone should consider oilcorp's aim to list its property subsidiary D'tiara as something big to brag about..their performance/business model in property management is not profitable all the while...unless there's changes. else there are better stocks out there than this coverted black hole.

Full agree with what you are saying here. The reason why I blogged about OilCorp was because there were a series of postings attempting to promote this stock at Sahamas. ( See this forum posting thread here at Sahamas: Oilcorp. ) I find it truly incredible for they were attempting to suggest OilCorp as a good buy based on fundamental reasoning. I was appalled because the events that surrounded OilCorp since its listing was incredible.

In the first blog posting, OilCorp, from day one, there was the 'talk was simply cheap because supply is more than demand' syndrome. Huge boasts of billion dollar oil projects was suggested from the company since 2004. Till today, where's the projects?

And the events in 2005 was simply shocking when OilCorp was caught by SC for submitting accounts which were simply false! (Hello Megan! Hello Transmile!)

And the pathetic attempts from the company to simply split their stock is simply appalling!

We are talking about a stock that is trading around 1.50. Doing a stock split of 1 into 10 is simply a nonsensical corporate exercise of epic proportion!

And then drumming up the possibility of them listing their property business is simply a joke given its own existing track record.

However, in a hot market, there are simply too many cliches. We have the insider cliches, we have the bullish sentiments cliches and as such any given stock(s) does stand a chance of moving higher. This is a fact that is undeniable.

So in a hot market, does fundamental matter?

Does earnings valuation matter?

Does the integrity of the company matter?

I do wonder.

Well, if one is not an investor, of course, it probably does not matter.

Oh yeah, OilCorp is simply moving higher each day! LOL!

Read more...

OilCorp II

Here's an update to OilCorp

Let's have a look at OilCorp's property section.

Posted on Business Times:

• D'Tiara's revenue may hit RM200m in 4 years
  By Roziana Hamsawi
  roziana@nstp.com.my
  
  July 16 2007
  
  OIL and gas support specialist Oilcorp Bhd expects its property subsidiary D'Tiara Corp Sdn Bhd's revenue to increase fivefold to RM200 million in four years.
  
  D'Tiara, which posted a revenue of some RM27 million last year, is confident that from 2011 onwards its revenue would be between RM150 million and RM200 million.
  
  Oilcorp executive director Phua Low Yiang said the confidence stems from the three projects that the company would soon undertake.
  
  They comprise a two-tower hotel suites and offices project at nearby KL Sentral, a leisure and health resort in Genting Highlands, Pahang, and a waterfront resort in Pulau Indah, Port Klang.
  
  Phua said total GDV for the three projects are currently estimated at RM1.3 billion and D'Tiara is in discussion for a listing on the Alternative Investment Market (AIM) of the London Stock Exchange to raise funds for the projects.
  
  "The intention is to list on AIM. We have nominated two advisers and are still in the midst of talks," Phua told Business Times in an interview.
  
  The 33-storey hotel and 33-storey office block project in Kuala Lumpur is expected to be launched early next month. The project's GDV is valued at RM330 million.
  
  The 14ha project in Genting Highlands, featuring bungalow lots and 20 resort villas, is still awaiting approval from the Securities Commission. Its GDV is estimated at about RM60 million.
  
  Both the projects are expected to be completed in 2010.
  
  The waterfront project in Pulau Indah meanwhile is a bigger version of the Tiara Beach Resort, which will incorporate an upmarket villa resort, canal bungalows for sale to the public and a commercial seafood centre.
  
  "Estimated GDV (of the Pulau Indah project) is RM890 million for the first 40ha of it while the remaining land will be developed only after the completion of the first phase," said Phua.
  
  He is confident that the project will change the public's perception of Pulau Indah and will be a centre of attraction.
  
  "The water there is still, calm and green. It is perfect for water sports," he said.
  
  All of the three projects will be sold to interested buyers who will then lease them back to D'Tiara.
  
  "This kind of model has worked well for us and for the investors too as they get good returns from this kind of arrangement," said Phua.
  
  Today, the bulk of D'Tiara's revenue comes from the two-year-old 980-room Tiara Beach Resort in Port Dickson, Negeri Sembilan.

Posted on the Edge.

• 16-07-2007: Oilcorp may list unit on AIM
  by Fintan Ng
  
  Oilcorp Bhd is contemplating listing its property arm, D'Tiara Corp Sdn Bhd, on the London Stock Exchange's Alternative Investment Market (AIM) in the third quarter (3Q) of next year.
  
  Oilcorp executive director Pua Yow Liang told The Edge Financial Daily the company was in the process of engaging an adviser for the proposed listing. He said a firm decision on the proposed listing would be made by September next year.
  
  "We have reached a stage where we can expand overseas and we would rather go to AIM," Pua said, adding that the Securities Commission was at present not too keen on the listing of property development entities.
  
  "We're launching three projects this year and next and that will require a lot of capital. These will give us a turnover in the next four to five years of up to RM1.2 billion, that's why we're planning to spin off the property arm and list it on AIM," he said.
  
  Currently, there are an estimated 98 pure property development companies listed on Bursa Malaysia.
  
  Pua said the amount to be raised and the percentage of shares Oilcorp would be retaining in the AIM-listed entity had not been determined. Other than property development and investment, Oilcorp's core businesses are in oil and gas, and fisheries.
  
  If successful, its property arm will follow in the footsteps of other Malaysian companies that have listed on AIM, namely Steppe Cement Ltd, Infoscreen Networks, Peninsular Gold, Velosi Ltd, GMO Ltd, Biofutures International, Mobility One Ltd and Plant Offshore Group Ltd.
  
  "We're injecting D'Tiara Beach Resort and three projects into the AIM-listed entity, which is valued at up to RM300 million, and an Oilcorp subsidiary will be set up to manage the company," Pua said.
  
  The three projects it will be launching are the 300-acre leasehold D'Tiara Waterfront Resort in Pulau Indah, Selangor with a gross development value of RM820 million for the first phase, the 2.19-acre freehold D'Tiara Hotel Suites in Brickfields with a GDV of RM320 million, and the 3.5-acre freehold Genting D'Tiara Leisure and Health Resort with a GDV of RM80 million.
  
  It also manages D'Tiara Beach Resort in Port Dickson, Negeri Sembilan on a sale-and-leaseback model.
  
  "We're positioning the property arm not only as a developer but also as a resort operator," Pua said.
  
  The residential property components of the Pulau Indah and Brickfields projects will be run on a sale-and-leaseback model with a guaranteed 7% net yield on five-plus-five-year leases.
  
  For the financial year (FY) ended Dec 31, 2006, the property arm contributed 15% of Oilcorp's revenue of RM153.23 million. Oilcorp posted a net profit of RM13.11 million in the same period.

Sounds extremely interesting eh?

Here are some links to OilCorp's recent earnings.

26th Feb 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

Click on the notes pdf file attached. See page 4.

Have a look at the screenshot below and check out OilCorp's property division.



Here's the link to their earnings in May 2007. Quarterly rpt on consolidated results for the financial period ended 31/3/2007. Again, have a look at the pdf file attached. Here's a screenshot of what I am looking at.

How?

• Oilcorp Bhd is contemplating listing its property arm, D'Tiara Corp Sdn Bhd, on the London Stock Exchange's Alternative Investment Market (AIM) in the third quarter (3Q) of next year.

Will OilCorp property arm be able to list on AIM next year? I have no idea but that's OilCorp's aim and yes it's always great to have a goal in each company but as it is, this property arm of theirs simply does not have a good track record, yes?

And yes OilCorp share has been rising.

All I can say is do not confuse a lousy share with a bull market!

In a hot market any share does stand a possibility of rising.

However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!

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