Freightlinks 1Q09 Results

It has been a while since I updated, mainly busy with personal commitments. Freightlinks released their first quarter results for WY2009 and I will talk more about it below.

I have yet to invest in Freightlinks. With all the happenings in the financial world I have spent time trying to comprehend what the news really mean and to gain a better understand of the whole system.

Coming to Freightlinks, since I wasn’t able to find a quarterly results for their last quarter (they summed it all up in a yearly one), I took their yearly results and divided them by 4 to get an estimation of their last quarter’s results from year.

Revenue for their 1Q09 was at $37,760,000 compared to the average of $34,857,000 in WY08. This equals to a gain of 8.32% in revenue. Net profit for 1Q09 is at $2,533,000 compared to average of $4,374,500 in WY08 which will work out to a drop in Net profit margin of 12.6% to 6.7%. While operating cost increased by 4.7%, it is an indication that their growth in revenue is not matching up to the increases in operating cost and also perhaps a sign that the effects of an economic trade slowdown is starting to show decreases in their freight forwarding income. It is necessary to keep track of their revenue in the result releases.

Freightlinks has a decrease in their cash and cash equivalent from $43,266,000 to $33,872,000 mainly to finance their acquisition of Citic Logistics which will provide them with a stake into the China Market. Secured liabilities have also increased from $92.5mil to almost a $100mil now, with $60mil payable in one year or less. Looking long term, their non-current debt to equity ratio is at 3.5 or about 28.6% which is leaning more to the positive side.

Also, maybe a piece of good news to investors, CEO Mr Eric Khua recently doubled his stake in Freightlinks from 0.12375 % To 0.23911 %.

Summary

EPS for this quarter is at 0.12 cents, P/E at 5.7. NAV is at 6.15cents calculated based on 2,103,287,102 shares. However with the exercising of their warrants in march next year, supposedly all warrants get exercised, the total number of shares will rise to 2,870,354,676 and taking into consideration their assets stays around the same figure, NAV will drop to 4.50cents. I am positive on Freightlink’s establishment in the local and overseas market and with this in mind, I will look to buy in at around 3.5/4cents which is a 20% discount to current market value of 5cents and about 10% discount to NAV to give myself a margin of safety.