TOYO--STILL BIG DEBTS......SMALL PROFIT

The group fell into the red with a net loss of RM7.51 million for FY17, against a net profit of RM1.47 million in FY16, mainly because it recognised provisions for impairment of goodwill of some RM8.76 million, and a RM360,000 investment in a subsidiary. Annual revenue declined 2% to RM79.7 million from RM81.74 million.

For the six months ended Sept 2017 it posted a net profit of RM454000.00.

As at Sept 2017 its cash and short term investment stood at RM9.47 million, total debt stood at RM20.95 million.

The group expects its power plant venture to generate an annual revenue of about US$800 million to US$900 million (RM3.36 billion to RM3.78 billion). Based on feasibility studies, the project could easily generate an annual net profit of US$200 million.

To reacp in Sept 2017 it was reported that the group is working on bringing negotiations on the matter of tariffs to a close. It aims to resolve the “last mile” issue — the power purchasing agreement (PPA) — with which it will secure the Investment Certificate (IC) issued by Vietnam’s planning and investment ministry and eventually kick-start the project. Hopefully, it can complete it by the second quarter of the next [financial] year (2QFY19).

With an estimated project cost of US$3.45 billion, Toyo Ink “will not have the financial muscle to stomach it (the project)” on its own. 

Hence, Toyo Ink is looking at jointly developing the project via a SPV with a partner, but will retain a 40% equity interest to remain the single largest shareholder of the project.

The SPV will fund about 25% of the total cost, while the remaining 75% will be financed via bank borrowings. That means Toyo Ink will still have to fork out about US$300 million for the project.

A rights issue or bonds issue will be among its choices.

RIGHT ISSUE??

DON'T PLAY...

Toyo Ink will begin construction of the power plant in 2019. The first unit of the power plant is anticipated to commence operations in 2023 — six years from now — with the second unit set to come on stream six months later.

2019??