When I was reading through the third quarter financial results of Nera Telecommunications Ltd, I found out that Mr Ang Seong Kang Samuel, the Chief Executive Officer of Nera Telecommunications Ltd has tendered his resignation. The reason given his cessation on SGX announcement was retirement. Mr Ang is 61 years old. Mr Beck Tong Hong will act as Chief Executive Officer in the interim.
Nera Telecommunications has also announced a special dividend of $0.15. The special dividend payout was from the sale proceeds of its payment solutions few months ago. (NeraTel Completes Sale of Payment Solutions)
Let us do a quick check on the fundamentals of Nera Telecommunications:-
- continued devaluation of Nigerian Naira against the US dollar.
- higher equipment sales and lower write back from project closures for nine months of 2016.
Nera Telecommunications have a long term and short term loans of $10.1m and $2.5m respectively.
As of 30th September 2016, Nera Telecommunications have a net cash position of S$74.1m. If you look at 3Q2016, the net cash flow from operating activities was negative $5.1 million due to the high working capital requirement. I noticed the trade receivables is negative otherwise, the cash flow should be positive.
A negative adjustment related to accounts receivable means you sold more on credit than you collected from customers who owed you money. It means your profit or loss for the month includes sales that you have not actually collected the cash for yet
For 9 months, Nera Telecommunications generated positive cash flow from operating activities of $0.7 million.
As of 30th September 2016, Nera Telecommunications has secured a $136.6 million in order in-take. This is an increase of 8.9% compared to the corresponding period in 2015 of $125.4 million.
The Telecommunications segment order book is 19.1% lower as compared to $64.2 million in the corresponding period in 2015.
The infocomm segment achieved a higher order book of 38.2% as compared to $61.2 million in the corresponding period in 2015.
Without the payment solution business, Nera Telecommunications still managed to achieve a healthy and higher order book of $136.6 million.
9 months cash flow is still positive although temporary it is negative in 3Q2016 due to negative trade receivables.
For 9 months, interest paid is still below cash flow from operating activities. Thus, Nera Telcommunications is still able to pay off its interest due to debt. This is not forgetting Nera Telecommunications have a net cash position of $74.1 million.