As Metronic plays a sub-contractor role for some government projects,the inability of the main contractor to obtain the payments from these government departments has caused Metronic to have poor operating capital and thus cannot pursue many new projects which it otherwise could. This is reflected by its miserable price of 5-6 sen per share.
Just how much is owed to Metronic?
In a filing to the Bursa today, related party trade receivables is RM46.914 million for sub-contract work
on certain federal public sector projects for the Government of Malaysia. RM10.594 million are from 1-3 years old debts while RM36.32 million are aged from 3-5 years old.
In July 2010, the Company did receive a minuscule repayment of RM290,000 in respect of an outstanding related party trade receivables amount owing from the Main Contractor.
As to the step to be taken to recover the monies, Metronic proposes
(a)Actively meet and negotiate with related parties to pursue the outstanding receivables;
(b) Contra the receivables against payables with the same related parties;
(c) Obtained consent from the Main Contractor Related Party to proceed with the certification and collection directly from Ministry of Health (“MOH”), Ministry of Finance (“MOF”) and Jabatan Kerja Raya (“JKR”). The claim is pending certification by JKR before submitting to MOF for approval;
(d) Negotiated and obtained a Deed of Assignment from the Main Contractor Related Party to pursue the receivables directly from the Government of Malaysia; and
(e) To commence legal action to recover outstanding receivables in the event of failure to recover the full amount.
In relation to the related party receivables due from the Main Contractor Related Party, subject to the finalization of the claim certification by JKR and the subsequent disbursement of payment from the Ministry of Finance, the Company expects the outstanding receivables to be fully recovered through progressive disbursements to be made by the Government of Malaysia not later than 31 December 2011.
With regards to the other outstanding related party receivables other than from the Main Contractor Related Party, the Company expects full recovery within 1 year from August 2010.
I do hope the various certification dapartments are doing their work. What they have not been doing is bleeding Metronic.
So much for Malaysia Incorporated and 1Malaysia.
Postscript:
The latest quarter-on-quarter result ending June 2010 showed major improvements in the accounts of Metronic.
Revenue has increased 77% from RM 2.269 million in 2009 to RM21.724 million in the current year.
From a loss of RM624,00 in the corresponding quarter of 2009, Metronic has turned in a profit of RM3.427 million.
As for profit attributable to shareholders, it also display a positive RM 2.532 million compared to a negative RM497 million accrued in 2009.
Earnings per share has increased from negative 8 sen in 2009 to 40 sen in 2010.
If Metronic can step up its debt collecting ability, things will be rosy once more for this moribund company.
1 comment:
Do u think it is worth of buying their shares
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