Coolan Group Limited: -24% Net Profit Decline in Q1 FY2025
Business Description
Coolan Group Limited is an investment holding company with two main business segments: coal storage and sales, and general cargo loading and unloading. The company’s principal subsidiaries are located in Singapore and China. [[3]]
Financial Analysis
Income Statement
Coolan Group reported no revenue in Q1 FY2025, compared to S\$2.49 million in the same period last year. This was due to the disposal of the medical business and the temporary shutdown of the company’s newly acquired subsidiary, HYI, in China. [[4]] The company’s net loss for the quarter was S\$1.25 million, a 24% improvement from the S\$1.65 million loss in Q1 FY2024. [[1]]
Balance Sheet
The company’s current liabilities exceeded its current assets by S\$59.38 million as of 30 September 2024, indicating a significant working capital deficit. [[13]] The company’s total equity stood at a negative S\$33.27 million, with accumulated losses of S\$153.39 million. [[3]]
Cash Flow
Coolan Group used S\$0.96 million in operating activities during the quarter, mainly due to losses incurred and changes in working capital. [[24]] The company generated S\$0.08 million in financing activities, primarily from a creditor and used to repay lease liabilities. [[24]]
Key Highlights
– The company is currently undergoing a restructuring exercise, which includes a proposed scheme of arrangement to restructure its liabilities. [[11-12]] – HYI, the company’s newly acquired subsidiary in China, is currently under a government-mandated shutdown and is required to undertake corrective measures and meet stricter environmental protection standards before it can resume operations. [[22-23]] – The company has divested its existing loss-making businesses and is now focused on the logistics industry, particularly coal storage and sales, and general cargo loading and unloading. [[25]]
Recommendation
For investors currently holding Coolan Group’s stock: Given the company’s significant financial challenges, including a working capital deficit and accumulated losses, it is recommended to hold the stock and monitor the progress of the ongoing restructuring exercise. The success of the restructuring and the company’s ability to resume HYI’s operations will be critical for its future performance.
For investors not currently holding Coolan Group’s stock: It is recommended to avoid investing in Coolan Group at this time, as the company’s financial position and future prospects remain highly uncertain. Investors should wait for further clarity on the outcome of the restructuring exercise and the company’s ability to stabilize its operations before considering an investment.
Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.
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