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| Dismal Future? |
Despite rising revenue to RM430 million, representing an uptick of 25%,brought about by high shipments and better prices, Adventa experienced a dismal net profit of RM4.2 million in fiscal year ended October 2011. This is an 88% drop from RM35 million earned in the foregoing year.
After writing off exceptional losses of RM9.23mil, the current quarter ended Oct 31 closed with a first time quarterly loss of RM3.66mil, with pre-tax profit standing at RM5.57mil before exceptional losses.
Adventa blamed the losses to a small fire incident at one of the factories. A damaged storage unit took a hit loss of RM2.12mil in fixed assets while goods damaged came up to RM4.61mil.
“While insurance claims are processed, these are written off as a loss. In addition, an investment bond of RM2.50mil which was part of a CLOP arrangement loan five years ago was declared a total loss in October 2011 upon maturity by the trustees and this is written off in this quarter,” it said.
As at fiscal year ended Oct 31, its total borrowings rose to RM189.28mil, compared with RM130.6mil, while cash and cash equivalents dwindled down to RM13.3mil from RM41.5mil recorded previously. Last December, the group issued RM30mil in nominal value Islamic medium-term notes from the Islamic commercial papers/Islamic medium-term notes programme with a give-day tenure.
Moving forward, the group said the erratic dynamism of commodities and currencies created a difficult environment for management control in cost and sales prices.
“To find a sure formula to manage these factors well is a challenging task in view of the commodity and foreign exchange markets reacting very sensitively to news with less valuation based on fundamentals,” it said.
So, it is rough waters for Kelantan-based Adventa until better times come. Otherwise, do not expect magic here!
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