ChanKitWhyePrior to his retirement, Chan Kit Whye (left) worked more than 30 years as Regional Finance Director, Financial Controller and Manager in a multinational specialty chemical business. He has played an active role in CPA (Australia) Singapore Branch, taking up positions in its Continuing Professional Development and Social Committees. Kit Whye is a Fellow of CPA Australia, CA of Institute of Singapore Chartered Accountants and CA of the Malaysian Institute of Accountants. He holds a BBus(Transport) Degree from RMIT, MAcc Degree from Charles Sturt University and MBA from Durham Business School.


EZRA's full year to Aug 2014 profit attributable to shareholders came in at US$45.3 million, a 16% decline as compared to the previous year. EPS was 4.65 cts US, vs prior year's 5.51 cts US.

ezra10.14Ezra (83 cents) trades at a trailing PE of 11x. Chart: BloombergCurrent PE is about 14 times, with a price-to-book ratio of 0.54 times.

Profit was lower mainly due to previous year's exceptional gain (US$67 million) on the disposal of AFS investment.

Total debt is US$1.55 billion of which US$510.7 million will be maturing within a year.

Total
 equity is US$1.18 billion, which means its debt to equity ratio is a very high 1.3 times.

Free cash flow is negative to the tune of US$228 million, mainly due to purchase of fixed assets of US$327 million.

In order to tame shareholders' anger for not paying any dividend, Ezra is proposing a share bonus issue of 1 for 25. But that in theory will not improve share price, but will dilute future earnings per share in the absence of significant profit growth.

Its goodwill on the balance sheet remains the same as compared to previous year, which means that the company did not amortise the goodwill in the books.

While the company is attempting to grow its business, it is burdened with debt, is poor in dividend payment, and has not considered improving costs or unlocking value for shareholders. Ezra, if not careful, will enter into challenging times when the O&G upcycle turns down or hits the peak of its growth.


Ezra's powerpoint presentation materials are here.
 
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Comments  

+1 #1 radon 2014-10-25 23:43
under the new frs, goodwill need not be amortised anymore but to be tested for impairment yearly or when there is an indication of impairment.
 

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