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20-04-2012, 05:32 AM
(This post was last modified: 23-10-2013, 03:13 PM by CityFarmer.)
There should be some 'actions' for this counter today after the following report appear in the Hock Lock Siew section.
Not Vested
The Business Times
April 20, 2012
Intraco should return cash to shareholders
BYTEH HOOI LING PRINT |EMAIL THIS ARTICLE
NOT many companies listed on the Singapore Exchange have the history and pedigree of Intraco. In 1968, the Singapore government set up the $50-million trading company and tasked it to assist in the creation of export markets for locally manufactured products, the promotion of external trade and to source for competitively priced raw materials, commodities and manufactured goods for the domestic market.
Under its founding chairman Sim Kee Boon, Intraco went on to play a major role spearheading Singapore's counter-trade with the former Eastern European countries, the USSR, Africa and the Middle East. It was listed in 1972.
Controlling stake
The company, however, outlived its usefulness. In late 2003, mainboard-listed PSC Corporation became Intraco's new controlling shareholder after it bought a 29.9 per cent stake in the loss-incurring group from NatSteel, Temasek Holdings and DBS Bank for around $18 million.
Since PSC - itself controlled by Hong Kong asset trader Charles Chan - acquired a controlling stake in Intraco, the fortunes of the company have languished even further.
At the acquisition price of 62 cents a share back in 2003, which at that time represented a premium of 12.7 per cent over the last traded price of the counter, Intraco is today trading at about 28 cents. It was trading at a low of 18 cents earlier this year.
Since taking control over the company, the new management turned it around by disposing of unprofitable businesses. From a revenue of $395 million in 2004, Intraco's revenue more than halved to just $174.6 million in 2011.
The bulk of the revenues came from trading in industrial materials which include metals and minerals, plastics, petrochemicals and rubbers, energy commodities which include coal and biofuels, trading and processing of agricultural and food products and others include investment holdings.
Last year, it suffered a loss of $7.2 million due primarily to provision for doubtful receivables. About $1.5 million was from losses at its semiconductor business which has since been discontinued. Its executive chairman, Allan Yap, meanwhile, took home more than $500,000 in remuneration. Executive director Foo Der Rong was paid between $250,000 and $499,000.
On average, the net earnings of the company in the previous seven years were about $3 million.
Given its lacklustre performance in the last eight years, it is no wonder that Intraco has pretty much dropped out of the radar of most investors.
But the thing is, at its current market cap of $28 million, the market is valuing the company at less than the net cash of $44.2 million it has in the banks.
The net asset value of the group is 70 cents.
In the past eight years, the average cash and near cash items in its books averaged $36.5 million. In that period, we've seen asset prices plunge to extremely depressed levels. Those were great opportunities to pick up good assets and new businesses.
No clear plan
Yet the management has continued to hang on to the cash, preferring to put it in fixed deposits in banks. There doesn't appear to be any clear plan as to what it wants to do with the cash. At the same time, it has cut the dividend for last year to 0.3 cents, from one cent in 2010.
Intraco is having its annual general meeting next Wednesday. Its shareholders might want to take the opportunity to query the management on what it plans to do with the money.
If it can't put the money into good use, then undoubtedly its long-suffering shareholders would find returning the cash to them a welcome move.
Not Vested
The Business Times
April 20, 2012
Intraco should return cash to shareholders
BYTEH HOOI LING PRINT |EMAIL THIS ARTICLE
NOT many companies listed on the Singapore Exchange have the history and pedigree of Intraco. In 1968, the Singapore government set up the $50-million trading company and tasked it to assist in the creation of export markets for locally manufactured products, the promotion of external trade and to source for competitively priced raw materials, commodities and manufactured goods for the domestic market.
Under its founding chairman Sim Kee Boon, Intraco went on to play a major role spearheading Singapore's counter-trade with the former Eastern European countries, the USSR, Africa and the Middle East. It was listed in 1972.
Controlling stake
The company, however, outlived its usefulness. In late 2003, mainboard-listed PSC Corporation became Intraco's new controlling shareholder after it bought a 29.9 per cent stake in the loss-incurring group from NatSteel, Temasek Holdings and DBS Bank for around $18 million.
Since PSC - itself controlled by Hong Kong asset trader Charles Chan - acquired a controlling stake in Intraco, the fortunes of the company have languished even further.
At the acquisition price of 62 cents a share back in 2003, which at that time represented a premium of 12.7 per cent over the last traded price of the counter, Intraco is today trading at about 28 cents. It was trading at a low of 18 cents earlier this year.
Since taking control over the company, the new management turned it around by disposing of unprofitable businesses. From a revenue of $395 million in 2004, Intraco's revenue more than halved to just $174.6 million in 2011.
The bulk of the revenues came from trading in industrial materials which include metals and minerals, plastics, petrochemicals and rubbers, energy commodities which include coal and biofuels, trading and processing of agricultural and food products and others include investment holdings.
Last year, it suffered a loss of $7.2 million due primarily to provision for doubtful receivables. About $1.5 million was from losses at its semiconductor business which has since been discontinued. Its executive chairman, Allan Yap, meanwhile, took home more than $500,000 in remuneration. Executive director Foo Der Rong was paid between $250,000 and $499,000.
On average, the net earnings of the company in the previous seven years were about $3 million.
Given its lacklustre performance in the last eight years, it is no wonder that Intraco has pretty much dropped out of the radar of most investors.
But the thing is, at its current market cap of $28 million, the market is valuing the company at less than the net cash of $44.2 million it has in the banks.
The net asset value of the group is 70 cents.
In the past eight years, the average cash and near cash items in its books averaged $36.5 million. In that period, we've seen asset prices plunge to extremely depressed levels. Those were great opportunities to pick up good assets and new businesses.
No clear plan
Yet the management has continued to hang on to the cash, preferring to put it in fixed deposits in banks. There doesn't appear to be any clear plan as to what it wants to do with the cash. At the same time, it has cut the dividend for last year to 0.3 cents, from one cent in 2010.
Intraco is having its annual general meeting next Wednesday. Its shareholders might want to take the opportunity to query the management on what it plans to do with the money.
If it can't put the money into good use, then undoubtedly its long-suffering shareholders would find returning the cash to them a welcome move.
