TWOD "Other Operating Expenses" is huge

ccsentha · 1 TWOD "Other Operating Expenses" is huge Sat Dec 01, 2012 11:14 pm

ccsentha

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when compared with previous quarter..........

TWOD "Other Operating Expenses" is huge when compared with previous quarter, has any one got any explanation for this??????????

If not for that extreme "Other Operating Expenses", the quarter results would have been very impressive.

http://www.cse.lk/cmt/upload_report_file/631_1354270667.pdf

sureshot · 2 Re: TWOD "Other Operating Expenses" is huge Sun Dec 02, 2012 7:17 am

sureshot

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may be too many farewell gifts given to ( resigned ) directors.
What ever NAVPS has gone up ne .
Lets be happy with it for the time Very Happy

Fresher · 3 Re: TWOD "Other Operating Expenses" is huge Sun Dec 02, 2012 9:55 am

Fresher

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The latest annual report indicates this in detail.
Other operating expenses consists provision for purchase back guarantee, which is not a cash expense, similar to the revenue of the company not being entirely a cash revenue.

So ccsentha, this is not really an "other" expense but should be considered as a core expense similar to banks making provisions for bad debts.

Sureshot - Note that the NAVPS is as a result of the revaluation of timber stocks which they do every period. This is where they get their reported revenue as well. NAV is 3.1bn, while timber stock is valued at 6.1bn.
I'm not familiar with timber valuations but this itself should indicate that if considered at all, TWOD is a very long term stock.

NAVPS is one method of valuation; we look at it since in the case of liquidation, how much will the shareholders get. In the case of timber, you cannot get the money tomorrow or even in a few weeks time. This is how we look at plantation companies as well.

An important factor one can look at for companies like these is the cashflow.
Free cashflow for the periods I have looked up has been negative,.
They have quite a bit of cash, (probably enough for a few more quarters) and quite low on gearing which are rather positive factors. But it may not be the case for too long if the trend continues.

ccsentha · 4 Re: TWOD "Other Operating Expenses" is huge Sun Dec 02, 2012 10:57 am

ccsentha

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sureshot wrote:may be too many farewell gifts given to ( resigned ) directors.
What ever NAVPS has gone up ne .
Lets be happy with it for the time

Mate, Actually the NAVPS has gone down from 48 to 44.

Fresher · 5 Re: TWOD "Other Operating Expenses" is huge Sun Dec 02, 2012 5:43 pm

Fresher

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ccsentha wrote:

sureshot wrote:may be too many farewell gifts given to ( resigned ) directors.
What ever NAVPS has gone up ne .
Lets be happy with it for the time

Mate, Actually the NAVPS has gone down from 48 to 44.

Looks like there have been restatements. Statement of changes in equity does not tally between the last two quarters. I can't see a reason why NAVPS should decrease although numbers suggest it.