CARS.N0000 Carson Cumberbatch PLC

[yellow knifeTop contributor]

Carson created history in 2007 with a bonus issue announcement  before the new company act came into power..With the bonus share announcement its price sky rocketed but soon fell back due to the fact that there was no EGM approval taken before bonus declaration.. I held 100 shares purchased at Rs 3500..This share gave me good profit gain . It remained highly overvalued for most of its lifetime..

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[yellow knifeTop contributor]

PE ration was also held very high

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[yellow knifeTop contributor]

HAYL and CARS follow in a close competition in Revneue

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[yellow knifeTop contributor]

CARS profit was held at a very high level but now its equal to HAYL

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[yellow knifeTop contributor]

Despite Earnings its Dividends are kept at a very low level

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[yellow knifeTop contributor]

dividends are paid as if there is no relationship with earnings..

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[yellow knifeTop contributor]

Debt is also held at a high level

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[The AlchemistTop contributor]

@ Yellow Knife - The above charts only give a superficial understanding of their profitability and financial position.

Re EPS, there is approx 2.5 Billion non cash forex loss which amounts to approx 13 rupees per share. thus actual eps is close to reported cash earnings per share of Rs 30. furthermore, change in fair value of biological assets is a loss and is non cash. so, these non cash deductions from cash profits tend to understate eps and overstate p/e.

Re Debt, is increasing only because the USD debt raised in Singapore, is incurred in Indonesia in Rupiah which has depreciated 40 % in last 2 years against the USD. so technically, whilst they are better off i.e. all sales of palm oil in usd to settle usd debt, but local value add in indonesia in rupiah depreciating, the accounting conventions require them to mark to market all o/s usd debt and thus in accounting translation, results in a non cash loss in rupees in income statements and increases debt in balance sheet and thus shrinks the balance sheet, lowering NAV.

All these are Accounting illusions :-)

Re Low Dividends - they are aggressively re-investing their earnings and growing their businesses. The Juggernaut is rolling. In 15 years they have created a palm oil empire. has their ever been a rights issue ? they have used their internally generated funds ( and debt) to develop 80,000 hectares + downstream business in 15 years.

Only companies that have no use for their retained earnings should return cash as dividends to shareholders.

[pathfinderTop contributor]

Thank you very much YK
Good input from Alchem,welcome back friend

[nihal123Top contributor]

Thanks YK and The Alchemist

[yellow knifeTop contributor]

Yes Alchemist

They have once mentioned the fact that they never went for a rights issue and they use internally generated funds for growth..

Appreciate and agree with all above in your post.

[yellow knifeTop contributor]

@ Yellow Knife - The above charts only give a superficial understanding of their profitability and financial position.

Re EPS, there is approx 2.5 Billion non cash forex loss which amounts to approx 13 rupees per share. thus actual eps is close to reported cash earnings per share of Rs 30. furthermore, change in fair value of biological assets is a loss and is non cash. so, these non cash deductions from cash profits tend to understate eps and overstate p/e.

Re Debt, is increasing only because the USD debt raised in Singapore, is incurred in Indonesia in Rupiah which has depreciated 40 % in last 2 years against the USD. so technically, whilst they are better off i.e. all sales of palm oil in usd to settle usd debt, but local value add in indonesia in rupiah depreciating, the accounting conventions require them to mark to market all o/s usd debt and thus in accounting translation, results in a non cash loss in rupees in income statements and increases debt in balance sheet and thus shrinks the balance sheet, lowering NAV.

All these are Accounting illusions :-)

Re Low Dividends - they are aggressively re-investing their earnings and growing their businesses. The Juggernaut is rolling. In 15 years they have created a palm oil empire. has their ever been a rights issue ? they have used their internally generated funds ( and debt) to develop 80,000 hectares + downstream business in 15 years.

Only companies that have no use for their retained earnings should return cash as dividends to shareholders.

Having a oil palm empire has created a negative impact with world oil price plunging.

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As above charts predict the positive relationship with Crude Oil and Plam Oil, Carsons Palm Oil empire will have a tough time ahead...

[The AlchemistTop contributor]

If we look hard enough, we can find Charts to tell the story according to a even random occurrence. The real story is that only 10 % of Palm Oil is used for biodeisel and if the increased mandates are implemented (i.e. 20% blend in indonesia in 2016), excess inventory wont be a factor. remember 90% goes for food & feed (not fuel). what Biodiesel does is mops us excess inventory which is now the main problem. i guess the El Nino will help water down the excess inventory and pick up slack if the Biodiesel mandates are not fully implemented due to falling oil prices.

& this only tells you half the story. Its all about the Ringitt. see, since CPO is denominated in Ringitt but transacted in Dollars, the 30 % decline in the Ringitt (in the past 18 months) has hurt CPO producers as they get 30 % less Dollars per ton of CPO regardless of Ringitt CPO prices.

This means that even if CPO in Ringitt is down, but the Ringitt strengthens against the Dollar, it is great for them.

and their comming results HAS to be good :-).
can anyone guess why ? so BUKI under 400 is a steal.. but who knows, price could come lower for non-fundamental reasons.

Buki @ 400 is usd 275 mill company. it owns 90 odd million shares in CARS + 35 % of a potentially 1.5 Billion dollar Palm Oil conglomerate. you can do the math.

and they are not about to collapse anytime soon. ok they may have a few not so good years but they will always make money. Remember LION too.

so, dont be fooled by charts. they sometimes give random patterns of correlations and its easy to make over simplified decisions based on them.

i guess MR learned the hard way :-)

[yellow knifeTop contributor]

@ Alchemsit

Thanx for your prompt comment and I know that you are an expert on Carsons...

I hope your expectation of coming results will be more accurate since you study this company in detail..

[yellow knifeTop contributor]

@ Alchemist

There is a fact that I like to argue with you. My understanding is out of all trend lines the Base Line is crude oil.

I can remember before 2008 grain price bubbling UP , BFL in its annual report predicted such movement and took precautionery actions..

Anyway since I like to keep Carsons thread for Carsons only, lets argue on this matter later in a sperate thread..

For the time being

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[The AlchemistTop contributor]

@Yellow Knife, nice Chart but again sorry i cannot agree.
i'm sure we can find a perfect negative correlation between oil prices and cigarette prices if we look hard.

The fact is in the 4-5 months, palm oil prices are up 15-20 % and crude oil prices are down ? % ?

common sense tells me that that declining oil prices DECREASES inflation and puts more cash in consumers pockets to consume food based consumer staples.

Crude oil prices impact palm oil through the 10 % biodesiel offtake. weather patterns, price, inflation & consumption determine palm oil prices.

and anyone want to bet oil will go back upto usd 50 per barrel sometimes in 2016 ?

[jiggysaurusTop contributor]

Wonderful wonderful story from the chemistry man, but this is now year 3 or 4 of his story and where has the FUKI and ARS share prices gone?

Maybe feed the two Selvas some palm oil and get them to die soon, that's the only way to get the value.

[yellow knifeTop contributor]

Carson mulls shutting down Indian Oil and fats refining operations

[Rajapaksap]

@Yellow Knife, nice Chart but again sorry i cannot agree.
i'm sure we can find a perfect negative correlation between oil prices and cigarette prices if we look hard.

The fact is in the 4-5 months, palm oil prices are up 15-20 % and crude oil prices are down ? % ?

common sense tells me that that declining oil prices DECREASES inflation and puts more cash in consumers pockets to consume food based consumer staples.

Crude oil prices impact palm oil through the 10 % biodesiel offtake. weather patterns, price, inflation & consumption determine palm oil prices.

and anyone want to bet oil will go back upto usd 50 per barrel sometimes in 2016 ?

Pl. refer following thread;

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[yellow knifeTop contributor]

A very useful link thanks

[yellow knifeTop contributor]

Now we can evaluate CARS again with 2015/16 annual report.

As we expected the PAT has come down.

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Though PAT of this plantation mastering holding company has come down another such RICH shows a different picture.

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[yellow knifeTop contributor]

Revenue of CARS has come down in the year and this was not the situation with another Holding company RICH where they are also highly exposed to plantations.

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[yellow knifeTop contributor]

Debt to Equity ratio is nearing 100%

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[yellow knifeTop contributor]

Company is not at all worthy for a dividend hunter when comparing with the market value.

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[yellow knifeTop contributor]

CARS was maintaining a high PE ratio as the company is a highly illiquid one

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