Tuesday, 30 June 2020
Green Packet's Revenue Jumps 50% in Q1 to RM147mil
From the title above, I guess all readers will think that GPacket has a great financial quarter.
However, when you try to find out how much profit it made, you might vomit blood.
Revenue increased 50% YoY but it suffered loss after tax of RM35mil.
OK, there's one-off item inside. Without it, the EBIDTA is still a loss of RM11mil and the loss has widened YoY, perhaps affected by Covid-19.
It's actually not a surprise at all when GPacket reported a loss-making result, I think investors are already used to it.
What I want to bring out here is why "The Star" is helping GPacket to "beautify" the report?
I have seen news title like this before in which revenue or profit increases by so much and so much but actually QoQ everyone knows that it's a very bad result.
For example, previous year similar quarter (YoY) profit was RM1mil and current quarter profit at RM2mil, the news title will be "100% increase in profit" or "profit doubled", but the usual quarterly profit is at RM10mil.
This result of RM2mil profit is a "gap-down" result by current standard.
This time The Star seems to deliberately and totally ignore the loss-making part. The whole article only talks about how much revenue has increased in all the business segment and doesn't mention whether it is making a profit or a loss.
I don't mean that GPacket is a bad company. Its revenue increases significantly and it seems to be in the right industry of AI, digital and communication service.
However, there must be a reason why it's always hard to make profit, and I think I know the reason.