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For these quarter
FIAMMA had increase their profit by increase the fair value of their fair value
of their investment property by RM 24,838,000. These is what we always say
paper gain not until FIAMMA sell their investment properties these profit is
just on paper and FIAMMA had to paid income tax with the money they do not earn.
FIAMMA also recorded a
higher asset compared to previous year. However by looking at the fourth
quarter report these is just paper gain on their asset such as property, plant and
equipment, investment properties and land held for development. FIAMMA had
reduce their cash and cash equivalent holding by 19.61%.
Besides that, FIAMMA
increase their non current borrowing by 22.6 times and current borrowing by
40%. FIAMMA also had negative operating cash flow in year 2014 and positive
financing cash flow. These means that FIAMMA is getting their cash from debt
than their operation.
Profit mostly from increase in fair
value of investment property. These are just paper gain. FIAMMA do not had
any profit in reality until they sell the investment properties.
The increase in asset on 2015 is just
paper value and FIAMMA cash and cash equivalent reduce by 19.61%.
Increase of current and non-current loan
Having negative operating cash flow and
positive financing cash flow.
Lately FIAMMA start to accumulate
its own stock, in the month of August and September FIAMMA had brought back RM
269,364.12 worth of shares which is 172,300 shares. As of 10 December 2015
FIAMMA owned 8,721,000 of treasury shares or 6.02%. They can buy back the share
until it reach 10%. I personally do not see any point for FIAMMA to buy back
their shares at the moment. FIAMMA share buy back is maintaining their stock
price at RM 1.60 – RM 1.8 level for the past few months.
With share buy back
FIAMMA should has negative financing cash flow however the financing cash flow
for 2015 is show otherwise. These mean FIAMMA is borrowing more money and only
buy back some of their stocks. Instead of share buy back FIAMMA might use the
money for other investment and borrow less money.
Share back back recently but increase