Netlink Trust (“Netlink”) seems to be back to a free cashflow deficit position again for FY2023. This means that it is borrowing from bankers to finance its CAPEX or if we put it bluntly, this means that part of the distributions back to unitholders for FY2023 is being funded from borrowings instead of earnings and will not be sustainable in the long run. I initially thought that this issue has already been resolved 3 years back as I understand that in one of the previous AGM (please see the comments section of this post), the management had mentioned that they will pay out distribution after taking into consideration the free-cashflow.
- FY2023 Distribution More Than Free Cashflow Again.
From the above computation screenshot using FY2023 full year numbers, the free cashflow generated is S$157Mil. However, it is paying out dividends of S$204Mil which exceeds the free cashflow by <S$47Mil>. The gap most certainly would have come from additional bank borrowings
