Pantech FY14Q2

Pantech FY14Q2 Financial Result

PANTECH	FY14Q2	FY14Q1	FY13Q4	FY13Q3	FY13Q2	FY13Q1
Revenue	153.8	162.2	156.3	171.5	164.1	145.2
PBT	21.9	18.5	18.8	20.9	22.7	17.9
PBT%	14.2	11.4	12	12.2	13.8	12.3
PAT	15.3	13.8	12.6	15.6	14.3	12.5
Manu Rev	76.8	82.5	65.5	70.7	61.8	55.1
Manu PBT	13	12.6	7.6	7.5	6.7	4.7
Trade Rev	77	79.8	90.8	100.8	102.4	90.2
Trade PBT	9.9	8.9	12.4	14.8	17.5	15
Total Equity	411.4	393.2	376.7	396.7	359.6	377
Total Assets	722.2	687.6	695.8	732.8	715.4	699.2
Total Liab	310.7	294.4	319	363.1	355.7	322.2
Cash	97.6	78.3	79.3	94.2	114.4	79
ST Borrow	148.9	151	181.1	208.6	193	181
LT Borrow	75.1	79.1	75.4	71.7	68.4	75.4
Net Cash Flow	13.9	0.5	-22.9	-9.6	10.5	8.4
Operation	29.5	4.6	38.6	47.1	60	22.5
Investment	-16.7	-5.8	-82.2	-75.5	-64.7	-34.8
Financing	1.2	1.7	20.8	18.8	15.2	20.7
EPS	2.91	2.7	2.64	3.33	3.13	2.77
NAS	0.73	0.77	0.74	0.74	0.72	0.74
Net D/E Ratio	0.31	0.39

Though FY14Q2 revenue is lower by 5% compared to the preceding quarter of FY14Q1, the PBT, PBT margin and PAT of FY14Q2 are all higher.

For the first half of FY2014, revenue and PAT are higher by 2.2% and 8.6% respectively compared to 1HFY13.

There is a significant shift of contribution from trading to manufacturing segment. The lower revenue from trading division is said to be due to lower demand from oil & gas sector with slower project execution. It is a bit worrying indeed.

Nevertheless, after acquisition of Nautic Steel and expansion of its manufacturing capacity, the contribution from manufacturing division is generally in an increasing trend. It has surpassed the trading division in FY14Q1.

The US anti-dumping suit on welded stainless steel pipes from Malaysia will take effect from September. Pantech did say that this product just comprises 3% of its total revenue. Lets wait and see how it goes in the next quarter result.

Since accumulating lots of debts in FY13 due to the acquisition of Nautic Steel, we can see that the borrowing has been pared down while the cash is increasing slowly. This is because Pantech is able to generate positive cash flow from its operation consistently.

As a result, its net debt to equity ratio has gone lower to 0.31 compared to 0.39 last quarter and it can still maintain its quarterly dividend by giving out a 2nd interim tax-free dividend of 1.2sen. 

Though it is not an outstanding quarterly result, the future of Pantech is still exciting to me. I think I have no reason to sell or reduce my small stake in Pantech at the moment.

Budget 2014 allocation for Oil & Gas sector is eagerly awaited...