Friday, July 31, 2009

Mobile-8 loss surged 170%

PT Mobile-8 Telecom (FREN) reported net loss of Rp269.6 billion in the first half 2009, surged 170% from the same period last year on poor operating margin.
Mobile-8 reported operating revenues of Rp189 billion, dropped 58% from the same period last year on lower revenue from telecommunication and interconnection services. 
Meanwhile, operating expenses increased 17% to Rp551 billion. As a result, Mobile-8 reported operating loss of Rp361.5 billion against Rp11.9 billion in H1 2008.
The company was lucky because of gain on foreign exchange translation and gain on change in fair value of derivative financial instrument of a combined Rp224 billion, more than enough to cover the surge in interest expenses and financial charges of Rp228 billion. Else, the company would have posted bigger net loss.
Mobile-8 lost most its market value in the last two years. The peak price of Mobile-8 was in May 2007 at Rp330 to represent a market capitalization of Rp6.68 trillion (US$720 million). But since then, the stock crashed to as low as Rp50 or a market cap of Rp1.01 trillion. Today the stock was closed at Rp53.
The company has total liabilities of Rp4.25 trillion, almost 10 times its equity at Rp457 billion. Worse, its current liabilities were Rp1.4 trillion, while current asset was only Rp661 billion. Technically bankrupt. Cash in hands? Well, only Rp8.8 billion. If we look at its cash flow statement for H1 2009, cash receipts from customers were not enough to pay suppliers and employees. 

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