Hyflux

Look at the balance sheet. How much equity it has? Minus off the intangibles and perpetual how much equity left??

(19-08-2016, 05:33 PM)Behappyalways Wrote: Look at the balance sheet. How much equity it has? Minus off the intangibles and perpetual how much equity left??

Perpetual capital securities - which usually carry a fixed dividend payout - are part of equity capital, and Hyflux has outstanding $964m of this stuff as at 30Jun16.....
http://infopub.sgx.com/FileOpen/Hyflux_2...eID=415621
In fact, if we add this huge amount of perpetuals to the company's share capital of $607.3m and retained earnings of $247.9m and other reserves, Hyflux is not at all short of equity. On the other hand, we must not forget that Hyflux is a big borrower too, and has outstanding a total loans and borrowings balance of $1341.1m as at 30Jun16.

Hyflux's main problem lies with the horrible profit margins of its underlying businesses, as measured by PBT and EBIT, and these 2 as a percentage of its revenue and large equity base. When the profits from the operating businesses are lacking and falling, I suppose it is fully understandable that Mr Market may just want to mark down both the equity shares and perpetuals at the same time.

IMHO, with so much outstanding perpetuals, Hyflux now also suffers from a wrongly conceived capital structure. For this, the entire BOD is at fault.

Hyflux already lost money in FY2014 , however it's CPS had been performing well until this month. Seems it didn't cause much concern and the new perpetual security was even over subscribed this year. Then why suddenly the market started to recognise the earning problem?


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(21-08-2016, 12:33 AM)SpaceX Wrote: Hyflux already lost money in FY2014 , however it's  CPS had been performing well until this month. Seems it didn't cause much concern and the new perpetual security was even over subscribed this year. Then why suddenly the market started to recognise the earning problem?


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Could it be news keep mentioning about many companies defaulting on their bonds payment and this scare the hell out of many spore bonds investors.

after studying the recent annual reports of hyflux, i find it a poorly profitable business. If anyone holds the ordinary shares, i would recommend a sell. In fact, i feel that the company will never redeem its CPS unless a powerhouse like temasek privatises it. So perpetual securities TRULY mean PERPETUAL because i think the company has no money to redeem it. Look at the loans it has taken up to grow its interesting business, i shudder.

One day, when it stops declaring dividends on its ordinary shares, it is also going to stop payment on its CPS. That will be very very sad. Selling the perpetual securities at 97 cents now is truly a steal. I wonder why people want to buyits perpetual securities. The nature of perpetual securities is very different from a bond and people should take special attention of it.

I did an investigation recently. Basically if you read their message carefully, they focus on increasing infrastructure building yet asset light strategy. This seems conflicting at first but I believe there is some rationale.

The money in it is the many years of SCA contracts and Membrane sales. This are the recurring future earning. Is just like printer ans cartridges analogy. You need not earn from printer. The goodies is the cartridge sales. And this need your printer to be popular.

Do one see any similarities???

Ms Elena Okorochenko, managing director and head of Asia-Pacific (ex-Japan) of S&P Global Ratings, noted in an article that the manner in which Swiber had refinanced its debts showed "significant refinancing risks and some inability or unwillingness to reduce debts".

Although Swiber had repaid US$3 billion in debt, it had also raised US$3.1 billion between 2013 and 2015. As at the end of last year, it had outstanding debts of about US$1 billion and only US$100 million of cash on hand.



On paper, Swiber appeared to be extremely profitable. Its earnings had grown from US$12.14 million in 2006 - the first year it was listed - to US$90.81 million seven years later in 2013, while revenues in the same period expanded from US$66.77 million to US$1.04 billion.

But buried in the details is the fact that the cash flow which Swiber got from its business was negative for almost every year between 2006 and 2013, dwarfing the accounting profit which it recorded.


Spotting the next one in a Swiber fix
http://www.straitstimes.com/business/spo...swiber-fix

We often forgotten about the fundamental, I am not talking about the fundamental of the figures, but rather the fundamental of the natural resources, which Singapore is craving for self-sufficient. Will it fails like Swiber, nope to me.

At the present low rates economy which low rates are expected to stay for another doom cycle, 6% is really a steal.

(06-09-2016, 04:55 PM)valuebuddies Wrote: We often forgotten about the fundamental, I am not talking about the fundamental of the figures, but rather the fundamental of the natural resources, which Singapore is craving for self-sufficient. Will it fails like Swiber, nope to me.

At the present low rates economy which low rates are expected to stay for another doom cycle, 6% is really a steal.

But I thought the perps have a clause saying that Hyflux need not pay the 6% on a condition that they don't also issue out dividends?

The Hyflux Perp is Cumulative. So still can collect later. However such miss payment is only useful to Hyflux due to surprise event where cash flow is not according to plan and need to push to next payment. During this period no share dividends allowed. This will push Hyflux to have to resolve quickly else they will have problem raising money later. However if the repayment problem is due to deeper issue, then Cumulative will not help much since it will likely be downward spiral. The share price will likely dive too.