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| Thakral Corp |
(Post 1 of 738) 05/06/1999.11:43:00 |
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I bought Thakral as a long term investment because of its distribution network in China. I have tried to do business there and I know how tough it is to even set up a joint venture that you can trust. Hence, for Thakral to have its own operations there and taking the lion share of the electronics business in China is really a show of commitment and determination. I feel that US companies are also trying in vain to penetrate this largest marketplace in the world. Thakral will be the ideal vehicle to do this and in the future, I see a lot of joint ventures being done with US companies. Thakral has wisely maximised its network by moving into the distribution of IBM computers. Soon, I belief that they will be distribution other related stuff as well. The internet will accelerate the growth of e commerce but you cannot deliver goods through the internet. One will still need the distributors to deliver the goods. What the internet cuts out is the middle man but both manufacturers and logistics companies will thrive. I belief that this will fuel the next internet related craze. However, when Thakral announced that they will be reporting a loss in the forthcoming annual report, I was totally shocked. I thought that this company was well managed but if they have to make provisions, then there may be cracks that have been hidden for a while. I knew that they had to make provisions previously for a bad mistake in manufacturing VCD players but I thought that they have learnt their lesson. While doing more research, I also realised that although they have a pot of money, they have also significant long term liabilities which will neutralise any cash reserves. Given the assessment above, I decided to sell off all my holdings in Thakral with a view of buying these back in the future. |
| (Post 2 of 738) 06/04/1999.10:34:00 |
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Announcement out soon and there seems to be alot of buying (maybe internal staff purchase?) What are your views buy for short term? How will the financials be like? |
| (Post 3 of 738) 06/04/1999.12:47:00 |
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I am not as hopeful. They are likely to announce a loss for the year for the first time since listing. Usually, when a company does that, it will also take the opportunity to announce significant write downs. |
| (Post 4 of 738) 06/24/1999.19:57:00 |
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I am still following this share although I do not have any more holdings. Today's announcement of the departure of Mr Mark Blacker is not good. Mark was the MD of their Media Division. This was the division that had trouble with its VCD production and has now gone into DVD. Interesting that Mark sold all his holdings a fortnight ago. I will not be surprised to see another writedown from this division in the forthcoming report. Only last month, Thakral gave a surprise with the announcement that it will not meet forecast and now this resignation : ----------------------------------- In the earnings announcement for the six months ended 30 September 1998 made by the Board of Directors of Thakral Corporation Ltd (the "Company") on 16 November 1998, the Directors indicated then that they looked forward to an improved operating performance in the second half of the financial year in view of the seasonal nature of the business. At that time, the Directors also indicated that they expected market conditions to remain difficult in view of the economic and financial turmoil which the Asian economies were experiencing and the difficult market conditions under which the Group was operating.Since the statement was made, several circumstances have negatively affected the Group's projections. In the second half of the financial year, operating conditions turned out to be more difficult than the Group had anticipated and it expects to make significant provisions for trade related losses.In view of these circumstances, the Group's management now expects to report a loss for the full year ended 31 March 1999 |
| (Post 5 of 738) 06/25/1999.01:24:00 |
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Since d coy announce d reporting of a loss in the coming annual report, it's near-term propects don't looks good. Fraser even changes its call from BUY to HOLD to SELL in less than 2 weeks. At that time, I'm quite heavy on d counter. My strategy on d counter is then : SELL ON STRENGTH. With d recent rise, I 'm able to release most of them at a slight profit. I'm now holding just a few lots of Thakral. Since d picture is still unclear 4 Thakral, my reco is still : SELL ON STRENGTH Just my view... |
| (Post 6 of 738) 06/28/1999.14:54:00 |
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Shares are suspended this afternoon pending the financial year results. This is a rather unusual move and the news must certainly be significant. Frankly, I am not too optimistic given the warning 2 months ago. I think that they will announce significant writedowns in their media business. Anyone ? |
| (Post 7 of 738) 06/28/1999.18:33:00 |
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Worse than I thought. Thakral lost a whooping $231 mil vs a profit of $68 mil last year. Not only were there writedowns but there were hugh exchange rate losses. The result is that their NTA is now only 20cts and they are in financial difficulties. --------------------------- For the financial year ended 31 March 1999 ("FY 99"), the Group incurred operating losses before extraordinary and exceptional items of S$58.4 million and operating losses after income tax and extraordinary items of S$231.6 million. These losses arose primarily from a number of significant charges that the Group recognized in the current year, which included foreign exchange losses in addition to provisions for inventory and receivables. In line with the strategy in prior years of hedging its foreign currency exposure, the Group continued, in the current year, the practice of entering into Yen option contracts, this being the currency in which most of its purchases and inventories are denominated. In October 1998, there was an unanticipated and significant strengthening of the Yen in comparison to the US Dollar. To address the sudden movement in the Yen rate, the Group increased its level of option contracts over and above previous years' levels with the view to protect the Group's assets, gross margins and profitability should the Yen weaken against the US dollar. However, there was a further unexpected strengthening of the Yen against the US dollar. As a result of this, the Group recognized exceptional and substantial exchange costs of S$160.3 million. Additionally, the Group's results were negatively impacted by continuing difficult market conditions, falling prices for audio visual products and slowing demand in its principal markets in China and Hong Kong. Furthermore, contrary to previous trends, consumer electronic product prices continued to fall even though the Yen continued to strengthen. These factors resulted in lower turnover for the full year of S$913 million as compared to S$1.12 billion in FY 98, negatively impacting operating margins and operating results. For the full year the Group also made provisions for inventory write-downs and for doubtful debts amounting to S$46.3 million as compared to S$24.3 million in the previous year. FY 99 results also include extraordinary losses of S$12.9 million which arose as a result of the Group's decision to exit certain non-profitable businesses, primarily VCD manufacturing. The results also include losses on marketable securities amounting to S$4.5 million as well as unrealized exchange gains for the financial year of S$12.4 million. Exceptional and extraordinary charges and losses that have negatively impacted FY 99 amount to S$173.2 million. As a consequence of the losses incurred in FY 1999, the Company is in technical breach of certain financial covenants under the facility agreement of US$250 million it has entered into in April 1997. The Company has advised its bankers of the technical breach and will seek a resolution in this respect. This has resulted in the reduction of the cash resources available to the Group after taking into account the losses set out above. As at 31 March 1999, the Group still has positive net tangible assets of S$119.3 million. 8. Commentary on current year prospects The Group continues to believe that its core businesses remain fundamentally sound and profitable notwithstanding the losses that were incurred in FY 99, which to a large extent were exceptional. The IT unit, which distributes IBM, HP and Apple Computers, experienced almost three fold increase in revenue from S$46.7 million in FY 98 to S$ 131.4 million in FY 99 and is expected to continue to grow significantly in the current year. Its manufacturing arm will start showing improvement as a result of improved efficiencies and good demand from major retailers in Europe and other foreign markets for the recently developed DVD players. The Group will be expanding its contract manufacturing of consumer products and PCB assembly activities in the current year. Also, expanding into new markets in Asia will stabilize its audio-visual distribution business, which had experienced the largest drop in turnover in FY 99. For the current financial year, the Group expects its cash flow to be adequate to meet its working capital needs and its operating results to be positive. In response to the losses that it has incurred in FY 99, the Group is taking action to enhance its balance sheet and restructure its businesses. These plans include certain organizational changes, divestment of non-profitable businesses and selling of non- core assets. The Group has now taken steps to limit foreign currency losses and wind down its outstanding option contracts. A special committee has been appointed to manage the Group's foreign exchange exposure. More formal risk-management and responsive procedures and controls are being implemented. Notwithstanding the fact that the Group will be operating under difficult market conditions in China and Hong Kong, its two principal markets, the Directors believe that, barring unforeseen circumstances, the prospects for the Group are to return to profitability in the current financial year. |
| (Post 8 of 738) 06/28/1999.21:06:00 |
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There must have been quite alot of indiscriminate buying in recent days due to "US$" fever. Some are lucky to be offered an exit by this opportunity. Unfortunately, those who just jumped in are suffering. Not sure if they are to be pitied at all. |
| (Post 9 of 738) 07/31/1999.00:24:00 |
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Thakral says in standstill agreement Singapore, July 30 - Consumer electronics distributor Thakral Corporation Ltd said on Friday it had agreed with the majority of its bankers to a standstill agreement. The company said in a statement the agreement would allow existing credit facilities to be made available to the group. It said the agreement is subject to compliance with certain conditions, some of which are still in the negotiation process. The company booked an exceptional loss of S$160.3 million on hedge costs after betting on the wrong side of the yen's currency direction, resulting in a technical breach of certain financial covenants relating to a US$250 million loan. Thakral reported on June 29 a S$218.72 million loss in the financial year ended March 31. The firm said at that time it was confident of returning to profitability. Source: Reuters |
| (Post 10 of 738) 08/06/1999.11:39:00 |
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Will Oldman, Kind Doctor, TAguilder, McCool advise on Thakral? What will the impact of Yuan devaluation on this company? |
| (Post 11 of 738) 08/06/1999.12:03:00 |
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The market is shying away from anything to do with China. I don't think that the Yuan devaluation is on the top of the agenda. More to do with the rising tensions between China and Taiwan. Look at some of the China index which is down 5 to 9% this am. http://www.fish.com.sg/regional.html I really do not like the look of this as the markets there should have a better idea of what is going on in China. As such, I have taken decided to play safe and have already disposed off all my shares that has links to China including Pac Century and Comfort. |
| (Post 12 of 738) 08/06/1999.12:14:00 |
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Sorry, correction. Sold off all my Comfort but not my Pac Century. Will explain under the share section. |
| (Post 13 of 738) 08/06/1999.13:30:00 |
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used to think that thakral has a good management team that can steer the company well.. but the recent writeoff of losses due to 'overhedging' of forex position shook the beliefs.. basically, a company that deals with alot of trade hedge their forex position in case big swings either way erode their profit.. when you 'overhedge', it means you 'speculated/punted'... that is not what a healthy company should be involved in.. (not if the company is not an investment company!) |
| (Post 14 of 738) 08/06/1999.14:08:00 |
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I share the same sentiments, freeier. I actually lost a little money in Thakral during the bull months of Jan to April ! Would have lost a lot of money if I decided to hold on longer. Fortunately, I decided to cut losses when the cracks started appearing. Will definitely not be touching this share until it goes down much much further. |
| (Post 15 of 738) 09/24/1999.22:00:00 |
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Singapore's Thakral to `return to health' in 3 years Singapore, Sept. 24 -- Thakral Corporation Ltd., a Singapore trader of electronic goods in China, said it will book a loss in the first-half ending this month, and may make a profit in the following six months, an executive said. The company will ``return to health'' in three years, aided by cost cutting and expansion into new markets, Managing director Inder Bethal Singh Thakral said in an interview. The company slipped into its first-ever loss, totaling S$231.6 million ($135.2 million) after a charge in the year ended last March, hurt by falling sales in China and foreign currency losses from bad bets on the yen. Those yen losses tallied S$160.3 million after the Japanese currency strengthened when Thakral expected it to weaken. The foreign currency losses spilled into the first half of this fiscal year until the company closed its hedge contracts three months ago, said Inder Thakral, who's based in Hong Kong. China sales, which account for 70 percent of the company's total revenue, remained weak in the first half, hurting profits, he said. ``Our China market remains very slow and sluggish,'' Inder Thakral said after the company's annual general meeting in Singapore. ``We're putting a lot of hope on spending by the Chinese government in large projects in the coming year, which will stimulate demand.'' Its shares fell by almost half in the last three months after it unveiled fiscal 1999 earnings, making it the worst performer on Singapore's benchmark Straits Times Index this year. The stock recently traded at 45.5 cents, down 2 cents, or about 4.2 percent on the day. China plans China is likely to release spending programs in information technology, telecommunications and other public works projects from next month, he said. That could help the company sell more IBM Corp. and Apple Computer Inc. personal computers, Sony Corp. DVD players and Sharp Corp. televisions, among the products it sells in China. Thakral's sales dropped 19 percent to S$913.2 million in fiscal 1999, hurt by increased competition from local manufacturers and weak demand in China. The company is 70 percent-owned by the Thakral company. ``It will be quite a while before (Thakral) can see some stability,'' said Jacqueline Low, an investment analyst at Vickers Ballas Investment Research Pte., who has an ``underperform'' rating on the stock. ``Their foreign currency exposure risk is still too high and there's always the possibility that China will devalue the yuan,'' said Low. A devaluation of the yuan, now pegged at about 8.3 to the U.S. dollar, could see a big drop in Thakral's earnings, she said. Annual general meeting The shareholders' meeting, which unanimously approved last year's earnings statement and cleared proposals to issue new shares and stock options to employees, was attended by about a dozen shareholders. One shareholder raised a question about the company's dependence on the China market. None raised the issue of the company's losses and the currency hedges. The company got most Japanese suppliers to accept payments in U.S. dollars instead of yen, said Inder Thakral, who's also the son of company chairman Kartar Singh Thakral. That step reduced its risks on currency fluctuations caused by buying most of its products in yen from Japan and selling them in dollars in China. The company now buys 10 percent of its products in yen and the rest in dollars, said Thakral. A year ago, it bought almost 70 percent of its products in yen requiring the company to hedge currency risks. The company has established a special committee made up of its directors and treasurer, which will now take decisions on managing foreign currency risks. It also appointed Arthur Andersen to suggest ways to revamp its business, cut costs, reduce staff and diversify into new markets. Although China will remain its main market, the company expects other southeast Asian markets, such as Taiwan, Korea, Indonesia to each provide S$10 million of annual sales in the future. That compares with about S$700 million in sales from China. It also expects sales of its profitable information technology products, such as personal computers, laptops and network instruments, to increase to S$240 million this year from S$131.4 million last year. Last year, these products provided a profit of S$2.2 million. Source: Bloomberg |
| (Post 16 of 738) 11/07/1999.22:43:00 |
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Anyone knows when is the half year financial statement coming out? Last yr was on Nov 16. I have some picked up @ 0.80 few months ago :( I've noticed that someone is always 'maintaining' it @ around 0.47 in the last few minutes of trade. Any advice as whether to continue holding? |
| (Post 17 of 738) 11/08/1999.06:59:00 |
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Erik, companies usually announce their results about the same time every year. If the result is somehow delayed, it is more likely to be bad news. I too hope that one day Thakral will change around but frankly do not expect to see this for at least another year..... |
| (Post 18 of 738) 11/10/1999.23:46:00 |
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starting to look interesting again, based on chart and not fundamental. chart pointed to a buy when vdh was about 52 cents but did not buy based on fundamental. so for this, bought just 1 this morning at 46.5 cents but did not monitor until late afternoon to see the volume and price surging. will just keep this 1 and see how it goes. lung kee and huan hsin is also looking exciting. |
| (Post 19 of 738) 11/27/1999.18:49:00 |
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Thakral has a reasonable balance sheet and does not look like a counter that will collapse. Its PC biz in China is growing in double digit growth. Once Arthur Anderson comes up with a plan to recapitlise the company, this counter would look cheap. As a contrarian, this counter is oversold and undervalued. All the bad news is out. Good idea to accumulate some. Bought at 45-46 and sold out at 52. Waiting for the consolidation back to 45-46 if possible. But notice that volume is picking up. It used to just do double digit volume but now more than a hundred or two daily. |
| (Post 20 of 738) 11/28/1999.01:36:00 |
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Hv vested interest, so tracking it. |
| (Post 21 of 738) 11/28/1999.16:55:00 |
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Just spoken to some Chinese players and found out that amazingly Tharkal is quite a household brand in China. I think the hedging failure has caused them to be out of the light for these days. Gone are the days in its US$ times when it hits the buying list of fund managers and as a China play hope. Lingering fears of Yuan devaluation and intense competition from WTO is likely to deter the 50 ct breakthrough in the short term. Heard that they are fostering some alliances with some techno players in ecom. Well, it looks like everybody is jumping into it. But really must distinguish the real ecom gem, otherwise it is just like another Pertama or is it Ossia (lack of substance). My 2ct opinion and i hold some int in Tharkal. |
| (Post 22 of 738) 12/02/1999.23:22:00 |
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Good to hear that Thakral is a household name in China. The stock has been quite well support. It's pretty obvious that there is acculmulation going on. They will be announcing their interim pretty soon and I guese AA proposed restructuring plan. Hopefully, there will be a good set of results and a strong recapitalisation of its balance sheet. Thakral has a reasonable balance sheet. It is wounded, but not out. So accumulate for the LT when it's fortunes turn round. Have vested interests in it. |
| (Post 23 of 738) 12/03/1999.16:49:00 |
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SimGH: Plse don't delude yourself. Thakral's name in China is a household name under the old regime of a "closed-door" protected market. They benefitted being manufacturers in China ahead of the entry of brandnames like Sony etc. The tariff protection also helped keep out competitors. This could change drastically following WTO! Jury is still out as to shape and form of competitive pressure, but suffice to say Thakral is in for a major fight! Civ: You wrote "...The stock has been quite well support. It's pretty obvious that there is acculmulation going on". I doubt your claims above. My proof? The numbers just don't add up. When the market was in flight earlier this year, a total of 303 mil shares changed hands in a price range of 67.5c to 94c between April and July. (Remember, there are just 585 mil total shares in issue). The losses were subsequently announced in late July and the stock collapsed down to 42.5c low. However, the total trades since that event have been very low volumes, and just 21.86 mil shares changed hands between July to Nov. So where is the collection? The bad news is yet to be in the price, and worse little or no insider activity at these levels, while active selling by insiders when prices were higher (see earlier postings here). My 2.5c worth of advise: exercise extreme caution! |
| (Post 24 of 738) 12/03/1999.22:58:00 |
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Warren, Seems like u are quite "against" Thakral. I used to think that this is a pretty good counter. But the forex hedge loss disappointed me immensely. Lucky I have not bought yet. It will be quite some time b4 I can fully trust the management of this company to invest in this again. That goes for a few other counters as well (shall not mention them). I think the econ crisis allows us to see thru some of them... Juz my view. Hope I didn't offend any thakral investors or employees/management. PS: btw Warren & me,Warrenb are separate entities though our usenames are quite similar :) rgds |
| (Post 25 of 738) 12/04/1999.02:08:00 |
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Accumulation normally starts when the market is really quiet. No news, no brokerage covering it, a sell call by major brokerage. But still, volume is done and I have been tracking. Between 43 - 47 cents, lots of 10 -20 were done and everyday, someone mops up just before closing. Creative Tech shared similar accumulation or same trends of listlessness from July - Oct before it sprang to life. I took the opp to accumulate at 16,9 - 18.6 . Took some guts when everyone was calling a sell on Creative and everyone was condemning Creative. Lucky that the risk paid off when it started to move. Too bad I sold of at 22 - 23 instead of dragging it till 25-26. Thrakal has the same problem. Lots of bad news and everyone condemning it. Take a look at its balance sheet. It's healthy and is no threat of going bankrupt. I have vested interest in Thrakral again after getting out at 51-52 two weeks back. Just hope the interim results shows it is in the black again and stock will start moving once again. |
| (Post 26 of 738) 12/04/1999.16:40:00 |
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Civ: I admire your courage and tenacity in speaking up for the underdog. Your approach to investing is exactly the sort of investment style we should all adopt--thinking for oneself. I too share that same spirit of support for the underdog and have developed an accuate sense of contrarian thinking in the process. I guess i forgot that when i let my emotions speak on this subject, rather than ley my mental analysis take charge. Thanks for pointing that out so clearly in your posting. Following from your argument, I'm not going to be so close-minded as I threatened to be (thanks Warrenb for pointing that out. Will be closely watching for developments at Thakral to detect a change in tidal direction. Folks, that is the value and power of this site! |
| (Post 27 of 738) 12/05/1999.02:27:00 |
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Civ, no offfence intended. but i still can't see evidence of thakral turning around. with the hugh loans (104.7 mil ST & 448.8 LT), wonder how are they going to make it without some concrete re-structuring taking place. even after that, the high gearing going to choke off whatever profit they can make. last close 0.48 over nta 0.20. i would have cleared all positions if still holding. cut loss if need to and don't look back. okay, this is just a view from fundamental perspective. i'm not good at TA. only can see that stochastic is oversold but think this is more short term (plse correct me if i'm wrong). also, at one stage, company was talking abt share buyback. in my mind then i was thinking - why not use the cash to pay back the bank loans first ? think this is poor cash mgt. hence when an ex-colleague told me then that his broker recommending a buy, i did not follow. in fact, i managed to convince him not to buy either. their attempt to hedge the yen & finally end up with such hugh losses is also not something i can easily comprehend. creative was quite a different story when it made that hugh write-off. It has an otherwise profitable bsz, reasonable margin, a world leader in soundcard, net cash to spare. at it's low abt close to 5+ usd, that was close (or below ?) nta.. if can remember correctly. i actually bit around then but sold off around 8/9usd (can't remember exact). 8/9usd still consider low now but at that period, such high% within a few days difficult to find ! finally, sometimes i can be wrong so plse make own decision. above just for sharing purpose & no offence intended good night! xdollar |
| (Post 28 of 738) 12/05/1999.07:13:00 |
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One of my mistakes in the past is trying to jump into a share too early. Reality is that stock markets takes time to register good or bad news. I am one who does not believe that share prices is a true reflection of a company's latest prospects. Usually it is behind. In many case, months behind. Of course, this does not apply to a share stake change or major corporate developments like share split, bonus, etc. It applies more to the fundamental changes within the a company. These take time to be reflected in the share price. As such, one need not rush into making buy sell decisions out of fear of missing the boat. I believe that Thakral will one day turn the corner. I would rather see it turning first before moving in again. Remember that if you and I are kiasu, the institutions will be more kiasu and with Thakral being a large company, one certainly needs institutional support for an significant rise in its shares. |
| (Post 29 of 738) 12/05/1999.13:03:00 |
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I shares Warren's sentiments about Thrakal. I too, used to value Thrakal highly, their wide distribution networks in China and that the Chairman himself could speak good Mandarin despite his Indian origins. I used to ignore comments that they are keeping their crown jewels private. However the facts remain that after interims was released, company still painted a optimistic 2nd-Half. Management were talking of a strong balance sheet and that its shares were undervalued, there were talks of "SingDollar Listings" & "Shares Buyback" to address undervalued share prices. Share prices run-up in the weeks before release of 2nd-Half results, in anticipation of better results. Instead Thrakal released a "Whopping $240m Loss for 2nd-Half" that completely wipe-out all previous 3.5-yrs of earnings". So in many investors mind, there are two question marks here:- i) That the Company honestly have no idea about the horrendous results for 2nd-half, else they will be too shy to talk about Share-Buyback plans. ii) Company actually have some idea, and talk up the share prices to provide some buffer for the anticipated price plunge upon announcement of very bad results. As far as I am concerned, I am NOT putting any of my money on Thrakal for a long long time to come. For a company with such recent "shocking" track record, and with current reported NTA of only 20c(assuming it is not overstated), I am actually quite surprised that market is still paying 48c for it now. Ofcourse I am talking from a fundamental investing perspective, for tradings, anything goes. |
| (Post 30 of 738) 12/05/1999.23:37:00 |
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Thanks for the replies. This forum indeed has good quality posting unlike FISH Forum. I do agree with Oldman that it could be premature to buy into Thakral as Xdollar has pointed out that they have questionable management. There is a dearth of research on Thakral as there is now little institutional coverage. However, one of my personal rules on investing is to look for fundameantally sound companies that have run into some rough patches like Creative. I believe that Thakral is in such a situation. The shining light for them could come from their IT division in Asia. It has tremendous growth and margin potentials so they should get back into the black. (Hopefull) have to wager by buying into their shares cheap. Just a reminder. Have vested interests. Someone just mop up 100 lots 2 mins before closing from 45 cents to 48 cents. I beleive Arthur and Anderson have come up with a concrete restructuring proposal that should turn them round. |
| (Post 31 of 738) 12/22/1999.18:08:00 |
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Very bad set of results! 100 Million dollar losses after extraodinary items of 41 million. Reserves basically wiped out and is in negative territory. Or in Accountant's jargon, a debit balance! :) The co, due to its losses are in technical breach of it bank loans and will appoint (more expenses) AA to restructure itself! NTA = 3.34 cents EPS = -10.01 The person submitting the accounts should also be re-examine on his/her accounting standards as SAS 6 states that diluted EPS is not reported if the basic EPS is a loss. :) No more vested interest after taking Oldman's advice of forgeting about the cost price! |
| (Post 32 of 738) 12/22/1999.21:19:00 |
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"The Group has now taken steps to limit foreign currency losses and wind down its outstanding option contracts. A special committee has been appointed to manage the Group's foreign exchange exposure. More formal risk-management and responsive procedures and controls are being implemented." This statement came from the company's financial statement June 28 for the year ended March 1999. Nowhere in that statement can an investor find any mention of material outstanding forward foreign exchange contracts that resulted in today's reporting of 41.78 million forex loss . The management even went on to tell the public(published in BT) that they have no more outstanding FX options positions. One get the impression that they have no more open foreign exchange positions but now we know (already too late) that THERE ARE ACTUALLY HUGE OPEN POSITIONS IN FORWARD CONTRACTS THAT GENERATE THE 41.78m FOREX LOSS . This raise the issue of disclosure standards . . whether it is adequate for investors to make INFORMED investment decisions in companies . In fact I am very surprised that the huge material foward foreign exchange positions are not pointed out by the auditors as contingent liabilities likely to have a material effect on the final results of the financial statements. |
| (Post 33 of 738) 12/22/1999.21:27:00 |
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GIC makes mistakes too. |
| (Post 34 of 738) 12/22/1999.22:15:00 |
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Goodness me. Bad at operating profit level, plus horrendous extraordinary losses. |
| (Post 35 of 738) 12/22/1999.22:33:00 |
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Sigh...I'm stuck with 10lots of these babies. I'm thinking of waiting till the rally next year to cut loss. Any advise ? :( |
| (Post 36 of 738) 12/23/1999.00:03:00 |
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Please read Jtls' posting below. He has made very good points on this company. This share is going to be under tremendous pressure tomorrow. All those who were hoping for a quick turnaround may be looking for shelter elsewhere. NTA has fallen from 62cts in Sept 1998 to just 3.34cts in Sept 1999. The groups borrowings now total $414 mil. ------------------------------------------- Half year results Review of the performance of the company and its principal subsidiaries For the six months ended 30 September 1999, the Group incurred operating losses of S$32.3 million before tax, extraordinary items, interest, depreciation and amortization. Losses after income tax and extraordinary items were S$100.6 million. These losses arose primarily from a number of significant charges that the Group recognized in the period, which included foreign exchange losses on historical contracts and provisions for inventory and receivables. In the past, the Group used to hedge its Yen foreign exchange exposure by entering into Yen option contracts. While during the period ended 30 September 1999, the Group did not enter into any new Yen option contracts, nevertheless it did incur exchange costs amounting to S$41.8 million on contracts that were carried forward from the preceding financial year and which only matured in the current period. In addition, the Group's results for the period were negatively impacted by continuing difficult market conditions and falling prices for its products. As a result the Group made provisions for inventory write-downs of S$20.5 million compared to S$11.7 million in the preceding year. Provisions for doubtful debts were S$7.4 million compared to S$5.8 million in 1998. As a consequence of the losses incurred to-date, the Group continues to be in technical breach of certain financial covenants under certain facility agreements it had entered into with its banks. The Group has appointed Arthur Andersen Associates Pte Ltd as its financial advisor to assist it in the implementation of a comprehensive restructuring plan including the restructuring of its debts. Commentary on current year prospects The Group expects to see an improvement in its operations for the second half of its current financial year with most of its core activities showing a positive trend. Its principal core business, which is the distribution of branded consumer electronic products in China and Hong Kong, is expected to enjoy improved volumes and higher margins. Margins in the second half of the year are expected to increase to approximately 6% from 4% in the first half of the year. In its manufacturing business, the Group will continue to focus on expanding its DVD manufacturing capability. Its recently introduced DVD players have been well received by major European and US buyers and to-date more than 110,000 units have been shipped out or ordered. As a result, its manufacturing unit in Shanghai is expected to report an improvement in operating performance for the full year. The Group's combined Home Entertainment replication and distribution business which operated profitably in the first half reported a gross profit from operations of S$2.5 million. The performance of this activity is expected to continue to improve in the second half of the year. The IT unit, which distributes IBM, HP products and other accessories suffered a set back in its operations as a result of price pressures and dumping of goods by local suppliers. Accordingly, this unit operated at significantly reduced margins and also incurred losses arising from inventory write-offs and certain logistic inefficiencies. The Group is now addressing these problems and expects that the operations of this unit will gradually return back to profitability. In response to the losses that it has incurred in the period, the Group is taking a number of initiatives to enhance its operational capability and restructure its businesses. These plans include the following: 1. The Group will work with its financial advisors, Arthur Andersen Associates Pte Ltd to develop and implement a comprehensive restructuring plan to ensure its success and enhance its performance including the restructuring of its bank debt. 2. It will dispose of certain non-core assets to enhance its liquidity and reduce its debt. Total assets identified for disposal amount to S$60 million. 3. Reducing working capital needs through efficient management of inventories and receivables to the extent of S$60 million. 4. The Group has also appointed external management consultants to assist it in improving its manufacturing capability. 5. The Group will develop plans for raising additional equity to the extent of S$120 to S$150 million to enhance its balance sheet structure, reduce its debt and fund its future growth. 6. Year to-date the Group has paid down a total of S$62.0 million of its outstanding bank debts. Over the last several months and in consultation with its financial advisors, the Group has held several meetings with its bankers to discuss and review the status of its facilities and the initiatives and action plans that it is taking to address the issues it is facing. In the light of these meetings, the Group believes that it will be able to reach an acceptable arrangement with its bankers. The Group is confident that the various initiatives and action plans it will be implementing will enhance its future operational performance and profitability. |
| (Post 37 of 738) 12/23/1999.00:24:00 |
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This sentence stands out, for me: "The Group will develop plans for raising additional equity to the extent of S$120 to S$150 million to enhance its balance sheet structure, reduce its debt and fund its future growth." Shareholders won't like that. Now, they should obtain support from all the significant shareholders in order to succeed in their fund raising. If they are unable to convince them to inject new capital, their fund raising will fail. So how do they do that? Price the rights at a significant discount to market price. You draw your own conclusions what will happen tomorrow. By the way, since Nicky Tan ex-Price Waterhouse of Amcol fame joined Arthur Andersen, AA has been involved in advising many troubled companies. Have you noticed it? |
| (Post 38 of 738) 12/23/1999.00:42:00 |
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Thakral Corp H1 to Sept net loss pre-extras 58.88 mln sgd vs profit 24.5 mln Thakral Corp Ltd six months to September results: Net loss pre-extras - 58.88 mln sgd vs profit 24.50 mln Extraordinary loss - 41.78 mln sgd vs loss 9.85 mln Net loss - 100.66 mln sgd vs profit 14.65 mln Sales - 345.31 mln sgd vs 428.45 mln Pretax loss - 58.19 mln sgd vs profit 25.92 mln Interim div - nil, unchanged Loss per share - 10.01 cents vs EPS 4.18 The group said it sees an improvement in its operations for the second half, with most core activities showing a positive trend. Thakral said the first-half loss arose mainly from foreign exchange losses of 41.8 mln sgd on contracts carried over from the previous year and provisions for inventory and receivables of 20.5 mln sgd. Provisions for doubtful debts totaled 7.4 mln. As a consequence of the losses, Thakral said it continues to be in technical breach of its bank facility agreements. Operating results were negatively affected by difficult market conditions and falling product prices, the company said. Thakral said it plans to raise additional equity of 120-150 mln sgd as part of its restructuring. Thakral Corp deputy chief executive Elie Baroudi said "we have to do it as soon as possible but have to do it in a careful way." The company is in preliminary negotiations with a financial institution to make a direct equity investment in the company. Another option is to make a rights issue, he said. Nicky Tan, partner at Arthur Anderson, said the company will be looking to raise the equity within the next 12 months. Baroudi said the company expects to be operationally profitable in the second half but would incur losses on the sale of assets. The non-core assets the company is looking to sell include hotel properties in Australia, which are expected to generate 26 mln sgd, as well as the company's stake in an Australian company. A warehouse in Hong Kong will also be sold along with shareholdings in Thai and Malaysian companies. The company said it will dispose of non-core assets worth a total of 60 mln sgd over the next 6-12 months and reduce working capital by 60 mln sgd through better management of inventories and receivables. The company has appointed management consultants to help it improve its manufacturing capability. It is also working with financial advisors Arthur Andersen Associates Pte Ltd to develop and implement a restructuring plan. So far the group said it has reduced its debt by 62 mln sgd to around 500 mln sgd. Thakral expects to see an improvement in its trading and distribution operations in the second half as a result of higher volumes and better gross profit margins. "Margins in this period are expected to increase to 6.2 pct from 4.1 pct in the first half," Thakral's deputy chief executive Baroudi said. He added that the company has also successfuly negotiated with its Japanese suppliers and purchases are now primarily denominated in U.S. dollars, thereby minimising exchange risks. "The risk of inventory overstocking has also been substantially eliminated through the implementation of a shorter ordering and purchasing cycle," he said. On its Shanghai factory which manufactures DVD players, Baroudi said the plant is expected to report an improved operating performance for the full year and that its DVD players have been well received by major Europen and U. S. buyers and more than 110,000 units have been shipped out. He added the factory had also decided to close down its Chengdu TV manufacturing plant, which went onstream in October. On its IT division which distributes IBM and HP products, Baroudi said the division suffered a setback in the first half as a result of price pressures and dumping of goods by local suppliers, and that the group has recently hired a senior executive to reinvigorate the business. Its Home Entertainment division, which consists of two optical discs replication plants in China and Hong Kong and a distribution network throughout China, reported a gross profit of 2.4 mln sgd in the first half. Baroudi said both plants have added new manufacturing lines to meet increased demand. |
| (Post 39 of 738) 12/23/1999.01:33:00 |
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In a BT report dated 30 June 99 someone commented on Thakral's $160m forex losses for the year ended March 31, 1999: "If you look at the hedging loss, then they would be protecting themselves against assets in the order of $4 billion to $5 billion..." Now , they do not have $4 billion in assets but they have compulsive losers . "...Deputy chief executive Elie J Baroudi denied Thakral had lost money on speculation, attributing the loss to overhedging as a result of being caught once on the wrong side and then having to make up for the earlier losses. "What happened after being caught on the wrong side was that we had to pay higher premiums for further hedging positions and the whole thing snowballed." But he conceded that "the line between overhedging and taking a bet on the currency was a fine one". There you have it ! Does it not sound like a gambler still in denial mode ? And by the way , Thakral have a gaming licences to operate poker machines in Australia. Mccool mentioned .." This sentence stands out, for me: "The Group will develop plans for raising additional equity to the extent of S$120 to S$150 million to enhance its balance sheet structure, reduce its debt and fund its future growth." Yes , the sentence is not only outstanding but it also pointed out the less than honest management too. In a ST report dated 28 August 99 this is what I read "...The group's chief financial officer, Mr P R Ahuja, even indicated then that the company was not cash-strapped since it had $80-$85 million in its coffers...." In conclusion , do you still want to trust them with your money ? . |
| (Post 40 of 738) 12/23/1999.08:56:00 |
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The bottom will fall out of this one. It looks very likely that the low of 34.5c back in Aug/Sept 1998 will be revisited again. I would like to repost something i wrote elsewhere in this forum which might give some handy pointers: --------------------------------------------- The asian crisis has taught us that when "big money" abandons a market (or stock) it takes a while for the selling pressure to ease. That is because, there is a need to wring the market through various phases of negative emotions before a final bottom is reached. First is shock: "Oh my gosh, how can this happen?" Second is rationalisation: "how low can it go?" Third is capitulation: "why did I buy the stock, oh yes, good fundamentals!" Fourth is self-doubt: "there must be something wrong with the company, the selling pressure is too persistent, the sellers must know something we don't". Fifth is frustration: "fundamentals be damned! The management is keeping quite and doing nothing" Sixth is panic: "Wow, no let up of selling, and worse buyers are so few." Finally, is fear: "maybe this company can go bust, better sell." I may exaggerate with funny quotes, but believe me, the emotions are real. All investors, punters and even gamblers go through these stages, each in varying degree. However, the disciplined traders (people who have been burnt too many times, so know better) lay in wait for the final "throw up" sell trade. That is when market collectively has made up its mind the stock is dead (after persistent declines, volumes pick up suddenly) that a final bottom is set. For our local market this round it was set when the ST Index hit a low of 800.27 on Sept 4, 1998. That was a good 17 mths from the pre-crisis high of 2127.81 in Feb 1997, and about 62% loss. But, many individual stocks that continued to drift listlessly and even made new lows, until the general tide was confirmed to have turned for the better in Jan 1999. The point is: In a bull market, one never knows how high is high, and conversely, in a bear market, one never knows how low is low? Exercise some patience, and, like the stealthy samurai lay in wait for the right opportunity to pounce, and pounce big. Experience is only attained after making plenty of mistakes. After all, most good traders had learnt only after they paid huge tuition fees, so shouldn't we learn from ours? Just my 2.5c worth |
| (Post 41 of 738) 12/25/1999.10:19:00 |
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warren, agree with your view. this animal is dead and no point to pick it. this animal will suffer worst than E&E or KC |
| (Post 42 of 738) 12/27/1999.12:35:00 |
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Accor Asia Pacific to acquire Thakral's Aussie hotel chain Leading international hotel operator, Accor Asia Pacific, has paid A$29 million to acquire Thakral's six-hotel All Seasons chain in Australia. According to "The Australian Financial Review", the deal sees Accor's Australian network bolstered to 90 properties for the French-backed hotelier. Accor, already Australia's largest hotelier with more than 10,000 rooms, will add a further 3,800 rooms and another brand with the All Seasons name in its stable. Thakral paid $3 million for the All Seasons chain in 1994 and the group had been discussing a sell-off for the past six months. With the accommodation sector increasingly driven by global distribution and marketing systems, small hoteliers are being squeezed out of the race for business. The deal, subject to final documentation and government approvals, allows Thakral to sell any of the properties managed by Accor with vacant possession, but Accor will receive a rebate. Thakral expects to book a $10 million dollar abnormal profit in the year ending June 30 next year. |
| (Post 43 of 738) 12/27/1999.13:26:00 |
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Eka, Thakral Holdings listed in Australia owns the All Season's chain hotel. Thakral Corporation is listed in Singapore and does not own any hotels. Hence, this sale does not translate into any money for Thakral Corporation listed here. |
| (Post 44 of 738) 12/27/1999.14:19:00 |
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Thks Oldman. Not going to touch this counter. |
| (Post 45 of 738) 01/02/2000.23:02:00 |
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THAKRAL CORPORATION LTD The Company wishes to advise that following the presentation of the Interim Report by its financial advisor, Arthur Andersen Associates Pte Ltd ("AA"), on 29 November 1999, the Company has, in consultation with AA, established an action plan to re-structure the debts of the Group. This includes the reduction of its debt by the disposal of non-core assets and reducing working capital needs through more efficient management of inventories and receivables, appointment of management consultants to assist in the improvement of manufacturing capabilities and raising additional equity. BY ORDER OF THE BOARD LO KIM SENG Company Secretary 31 December 1999 Submitted by Lo Kim Seng, Company Secretary on 31/12/1999 to the SES |
| (Post 46 of 738) 01/12/2000.11:07:00 |
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Singapore Thakral Hldgs Buys Australian Resort For AS$20M Singapore's Thakral Holdings Ltd. (P.TKL) said Tuesday it will buy the Courtyard Marriott Great Barrier Reef Resort for A$20 million from KM Australia Pty Ltd. The acquisition of the 189-room resort in Cairns includes a 1.7 hectare site that can be developed into residential or holiday apartments, the company said in a statement. |
| (Post 47 of 738) 01/12/2000.12:00:00 |
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Thakral Corp is the listed company in Singapore. Thakral Holdings is listed in Australia. |
| (Post 48 of 738) 01/18/2000.03:40:00 |
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Thakral Corp sees loss in yr to March Thakral Corp Ltd said it now expects to report a pre-extraordinary loss for the year to March 2000 after forecasting a return to profitability in its last set of final results in June 1999. The expected return to profitability assumed economic conditions in Hong Kong and mainland China would improve during the course of the year to March 2000, leading to greater consumer demand for the company's products, it added. Since mid-October, Thakral said its directors were aware the group would make a loss in the six months to September and were advised the company's financial position was being reviewed. This review resulted in further provisions of 27.9 mln sgd in December. |
| (Post 49 of 738) 02/02/2000.09:49:00 |
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Singapore's Thakral To Sell Assets In Restructuring Move Singapore's Thakral Corp. (THAK.SI) said Tuesday it will sell its portfolio investments, property assets in Hong Kong and hotel-related investments in Australia as part of a restructuring process. The assets represent more than half of the S$60 million in non-core assets that Thakral intends to sell, said Mike Martin, manager at Arthur Andersen Associates. Arthur Andersen was appointed Thakral's financial adviser in December, when the distributor of consumer electronics reported a loss of S$58.9 million (US$=S$1.6975) for the six months ended Sept. 30, 1999. The company posted a net profit of S$24.5 million for financial year 1998. Thakral's restructuring program includes the disposal of S$60 million worth of non-core assets. As a first step, Thakral recently closed its television manufacturing plant in Chengdu, China. |
| (Post 50 of 738) 02/09/2000.11:01:00 |
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PacNet,Thakral in China Internet venture SINGAPORE, Feb 8 - (Reuters) Singapore Internet service provider (ISP) Pacific Internet and electronics distributor Thakral Corp Ltd will form a joint venture company in China to advise Chinese ISPs, Thakral said on Tuesday. It said in a statement the company would offer technical, marketing and management advisory services to licenced firms. Thakral was negotiating with three Chinese ISPs operating in Beijing, Shanghai and Guangzhou, which could be given franchise licences to use the Pacific Internet brand name and marketing methods in China. The joint venture, which would be 51 percent-owned by PacNet, would take major stakes in these ISPs when China liberalises its Internet industry upon its entry to the World Trade Organisation (WTO) later this year, the statement added. "Next to India, China has the most promising Internet market in Asia. Imagine the potential of selling to an exploding Internet-savvy middle-class population in that country," a top PacNet official said in the statement. Thakral said it would help the joint venture by providing its extensive network and experience to ensure regulatory compliance. Further details would be announced on February 15 to coincide with PacNet's fourth quarter earnings results, the statement said. PacNet launched Internet access services in India in January, and saw a potential subscriber base of 25 million in Bombay, New Delhi and Bangalore. |
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