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QAF
19-01-2019, 11:56 AM.
Post: #101
RE: QAF
I think this Impossible Foods is like what the present 'mock meats' offer, but of better quality.

These mock meats are still only at the stage of producing 'minced meat.' They are not able to make a beef steak or chicken/pork chop, yet.

Furthermore, to produce mock meats of high quality resembling the real thing cannot be cheap. Or at least, the technology is not available yet.

It will also take some time for consumers to be educated, and convinced, that high quality mock meats are superior to the real thing. There is also the question of ingredient and process used in producing Impossible Food meats. Are the vegetables used free of pesticides? Are the vegetables of non-gmo specie?

Nevertheless, having less anti-biotics and growth hormones in our food chain is definitely positive for human health. And there is definitely a market for 'safe foods.' But it isn't so simple, since where most food sources are 'polluted' in at least some ways, and especially the mass-produced and cheap ones.

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02-03-2019, 06:13 PM.
Post: #102
RE: QAF
QAF surprised shareholders by maintaining a 4 cent final dividend, in spite of its 1.4 cent EPS. It also reported a Q4 profit, in spite of weakness in the pork market.

https://links.sgx.com/FileOpen/QAF%20Lim...eID=544973

Its latest result show a cash balance of some $60m against loans of $110m. So while QAF is able to pay the proposed dividends of $23m from its cash balance, it will be left with a deeper net debt position of $73m.

Against total assets of $783m, a 10% leverage seems acceptable if such unsustainable dividend payments are not expected to be recurring.

But if the intent is to maintain a 5 cent annual payout over the longer term, QAF certainly cannot continue pilling on debts to feed shareholders. 

So the question we have to ask is whether QAF's businesses can support a 5 cents payout, or about $28m, every year.



A) The bakery segment has performed better in FY18 than in FY17. 

Segment EBIT increased from $23m to $26m. 

Share of profits and royalty income from GBKL increased from $12.4m to $14.6m.

Revenue from Philippines increased from $171m to $183m.

Management believes that the bakeries will continue to do better in FY19, as it reaps the benefit of its capital expenditure in the developing economies of Malaysia and Philippines.


B) The trading segment failed to make any contribution in FY18, compared to a $5m EBIT in FY17, due to the amonia leak incident at its Fishery Port warehouse.

Repairs have been made, and this segment should continue to return to its former profitability for FY19. 

If QAF is succeeds in making a claim from its insurer, then that would be a bonus.


C) QAF suffered $8m of EBIT losses from its pork business, compared to a $14m EBIT for FY17. 

But this segment seems to be on the road to recovery. 

Pork prices are recovering, and grain prices are off their highs. See page 3 of the following report:

http://australianpork.com.au/wp-content/...022019.pdf

Shareholders should be hoping for QAF to dispose of this segment when it eventually recovers.


Caveat

If there are no large negative movements in pork, grain, and energy prices, QAF should be able to maintain its 5 cents dividend for FY19. But of course, nobody knows for sure how these markets will behave. FY19 could be another bad year for QAF. 

QAF also mentioned that it is on the lookout for acquisitions. Any big purchase will mean less cash for distribution to shareholders, and possible value-destruction if a bad/overpriced asset is purchased.

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03-03-2019, 06:03 PM.
Post: #103
RE: QAF
(02-03-2019, 06:13 PM)karlmarx Wrote: QAF surprised shareholders by maintaining a 4 cent final dividend, in spite of its 1.4 cent EPS. It also reported a Q4 profit, in spite of weakness in the pork market.

https://links.sgx.com/FileOpen/QAF%20Lim...eID=544973

Its latest result show a cash balance of some $60m against loans of $110m. So while QAF is able to pay the proposed dividends of $23m from its cash balance, it will be left with a deeper net debt position of $73m.

Against total assets of $783m, a 10% leverage seems acceptable if such unsustainable dividend payments are not expected to be recurring.

But if the intent is to maintain a 5 cent annual payout over the longer term, QAF certainly cannot continue pilling on debts to feed shareholders. 

So the question we have to ask is whether QAF's businesses can support a 5 cents payout, or about $28m, every year.



A) The bakery segment has performed better in FY18 than in FY17. 

Segment EBIT increased from $23m to $26m. 

Share of profits and royalty income from GBKL increased from $12.4m to $14.6m.

Revenue from Philippines increased from $171m to $183m.

Management believes that the bakeries will continue to do better in FY19, as it reaps the benefit of its capital expenditure in the developing economies of Malaysia and Philippines.


B) The trading segment failed to make any contribution in FY18, compared to a $5m EBIT in FY17, due to the amonia leak incident at its Fishery Port warehouse.

Repairs have been made, and this segment should continue to return to its former profitability for FY19. 

If QAF is succeeds in making a claim from its insurer, then that would be a bonus.


C) QAF suffered $8m of EBIT losses from its pork business, compared to a $14m EBIT for FY17. 

But this segment seems to be on the road to recovery. 

Pork prices are recovering, and grain prices are off their highs. See page 3 of the following report:

http://australianpork.com.au/wp-content/...022019.pdf

Shareholders should be hoping for QAF to dispose of this segment when it eventually recovers.


Caveat

If there are no large negative movements in pork, grain, and energy prices, QAF should be able to maintain its 5 cents dividend for FY19. But of course, nobody knows for sure how these markets will behave. FY19 could be another bad year for QAF. 

QAF also mentioned that it is on the lookout for acquisitions. Any big purchase will mean less cash for distribution to shareholders, and possible value-destruction if a bad/overpriced asset is purchased.

but you are assuming all dividend will be taken in cash. if i recall correctly that promoters and lots of shreholders take scrip so cash flow outflow wont be so high

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03-03-2019, 07:43 PM.
Post: #104
RE: QAF
(03-03-2019, 06:03 PM)buddy Wrote: but you are assuming all dividend will be taken in cash. if i recall correctly that promoters and lots of shreholders take scrip so cash flow outflow wont be so high

The latest result announcement indicated that the final dividend of 4cts per share is in cash, not cash/scrip as in previous dividend payouts.

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