What Investors Need To Know About The Latest Quarter Results at Yoma Strategic Holdings Ltd

Yoma Strategic Holdings Ltd (SGX: Z59), which has businesses in the real estate, agriculture, automotive, luxury tourism, and retail industries in Myanmar and China, saw its revenue rise 53% and net profit more than treble in the second quarter ended 30 September 2014 as compared to a year ago. This was announced yesterday.

Top line grew from S$27 million to S$41.2 million due to excellent performance in its real estate business, mainly from its Star City project, which made up around 80% of total revenue. Star City is located in Thanlyin Township in Yangon, Myanmar.

Net profit surged by 221% year-on-year from S$3.3 million last year to S$10.8 million in the latest quarter. The increase was mainly on the back of fair value gain on investment properties and foreign exchange translations.

As of 30 September 2014, the firm had a total debt of S$24.6 million and a cash balance of S$61.5 million. This translates to a net cash position of S$36.9 million. In comparison, this figure was at S$2.4 million at the end of March this year. The huge rise in net cash position in the latest quarter was due to a private placement that yielded gross proceeds of S$94.5 million in July.

Even though the bottom line had done very well as seen earlier, the firm generated negative operating cash flow of S$8.7 million, as compared to a negative operating cash flow of S$2.7 million in the previous year.

Speaking of prospects, Andrew Rickards, Chief Executive Officer of Yoma Strategic, said, “Economic and political developments generally bode well for the outlook for the Group. The number of foreign multinational companies coming into Myanmar continues to grow bringing an increase in the number of mid-level and senior executives into the country, often into Yangon. This has a direct impact on our property leasing business and supports the Group’s decision to hold more residential stock on the balance sheet available for leasing at its two flagship developments, Pun Hlaing Golf Estate and Star City.”

Recently, the firm also announced that it has been selected by Yum! Brands, an American fast food company, to be its franchise partner in Myanmar to bring KFC into the country. This will allow Yoma to dip its fingers into Myanmar’s burgeoning middle class. The first outlet in the Southeast Asian country will open next year.

Shares at Yoma closed at S$0.67 on Wednesday and is going at 45 times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.