Saturday, May 24, 2014

Asian Bamboo annual report 2013

Asian Bamboo, front page, 2013

Since their announcement of the results for the full year 2013 the share price has dropped with around -30%. The report was awful. What was then in it?

To see the awful report in full from Asian Bamboo annual report 2013 please press that link.

Well, well, well. The table below shows the income statement for 2013 compared to 2012 and it is indeed bad. So the revenue was down by -55% the cost likewise but still higher costs than revenue. Once again they wrote down the value of the forests that they have so additional -26 million there... then comes the most funny of all which is other expenses since that is -165 MILLION euro. Hmmm... that is a lot for a company with 31 million revenue. So on a share that is being traded for around 1.1 € they made a loss of -12.85 € per share. Those figures are simply spectacular.

Asian Bamboo, income statement, 2013

I tried to find out what this other expense was that has caused the company to go from 288 million € in equity to 87 million and that also caused the company to go from 60 million € in debt to 207 million € in debt. I then stumbled upon this statement:

Asian Bamboo, Onerous, Statement, 2013

Ah, so it is caused by onerous plantation lease contracts which then shifted these millions of equity directly into a debt but hey, they are non-cash item so the cash flow was not influenced and everything is still "peachy" in the company. I had to look up what onerous means and here is a definition of it. So this means that Asian Bamboo has paid excessive amount of money for leasing bamboo plantations that was expected to generate a revenue and was therefore looked upon as being an asset. Now they are not harvesting any bamboo shots or trees because they can not hire any people and for that reason these leases have become liabilities instead. It is scary how considered assets can become liabilities in this way and I was completely in the blue with Asian Bamboo concerning this matter and that something like this could even happen.

Another thing that I loved is that even though the company is dying the management had the indecency to increase their salaries by 4%. When my own company has been close to going bust I was forced to decrease my salary to make ends meet and it says a lot when the management goes in the other direction...

They continued claiming that going into property will be an excellent move for Asian Bamboo etc. that I simply ignore to read and another disturbing sentence was that they expect revenue and profit to earliest show a positive trend in 2015.

Conclusion: I have no confidence in the management or the bookkeepers Deloitte & Touche any longer. As mention before I should have sold these shares the second fundamentals changed but I failed to do so and now I pay the price. The only reason I still keep them now is to make the burn-mark in my skin as deep as possible and to realise the losses from Asian Bamboo the day I decide to sell the shares in one of my profitable companies to avoid any tax payments and in the meantime... who knows... maybe the property bubble in China will still be crazy so that the revenue and profit does increase again. See here for the previous analysis of Asian Bamboo.


No comments: