Posted on April 19, 2010 - by Drizzt

M1 First Quarter 2010:I am not seeing what analysts is seeing

Photo by DerrickT

Note: Figures mentioned in this report can be found in this M1 Spreadsheet here

So M1 Limited announced first quarter results today.

• Revenue was higher by 33.4%. This is due to the handset sales. iPhone! iPhone! iPhone!
• Expenses was up by 41.4%.iPhone! iPhone! iPhone! One thing you would notice is that handset expense can make up quite a sizable chunk of expenses.
• Cash holdings increase from 7mil to 14 mil. It is still anemic compared to Starhub. Can’t understand why alot of people say their cash position better than Starhub.

Lets take a look at some reporting in detail.

Profit Margin, ROIC and ROE  much lower

ROIC is lower at 10.75%. This is compared to Q1 2009 which is at 29% or last quarter which is at 25%

ROE is lower at 10.23%. This is compared to Q1 2009 at 24% or last quarter which is at 25%.

What this means is that there is a drastic fall off in return on your investment, which ever metric you use. Note that i dun use profits as the numerator but operating cashflow.

Profit Margin declined to 15.78% from Q1 2009 which is 22%. This is also lower than last quarter which is at 17%

Cashflow, Capex and Free Cashflow analysis

Operating cashflow has decline substantially from Q1 2009 from 61 mil  to 30 mil. This is low compared to the 64 mil in Q4.

You will have to go back to Q2 2007 to see a figure lower than that! Whats happening here.

Capex is low at 9 mil. no surprise since looking back, Q1’s capex have usually been low.

No dividends paid out this quarter.

So net net, the current free cashflow is 21 mil. Positive is good but really the declining operating cashflow needs to be monitored. Read more…

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1. 2010 Top 34 Stock Picks in Singapore by Analysts
2. Healthway Medical: Second quarter results
3. M1 Limited Q2 2010 Results:Increases customer base