Quote:
Originally Posted by moneymoney
I think we should thread cautiously here. the fact that a company makes a loss one year does not mean its going to continue in perpertuality. It could be that the loss was as a result of one-off capital expenditure.
Though I've not see their FS for YE2007 but the MD maybe right if he can justify the loss and you can see the projections. Remember WAPCo and Ikeja Hotels too had huge losses (i think) before their current standing.
On a less serious note, since when did the NSE become connected with loss or gain. Did you not hear of the company (can't remeber) that had been wound up some years ago still appreciating on the floor. Or of Juli pharmacy with 3 known outlets still appreciating (they must be selling crack).?!?!?
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Capital Expenditures do not show up in your income statement (except for depreciation), they show up in your balance sheet. For a company to make N3.22B one year after making a loss of N0.475B will require something special, especially given that the revenue was only N107M! WAPCO did not have a "revenue issue", I believe the loss they declared had a lot to do with high interest expense/operating expense. Even if we imagine a 70% net profit margin (who dash dem that kind margin?), they need a revenue of N4.6B to achieve that PAT. Do you see them hitting N4.6B from N107M? NSL's Q1 ended in March, so hopefully, they'll release some numbers soon.
But like you said, let's see what will happen.