SMDC - Q311 Results

SMDC reports a very interesting Q311 results. Operations still consumes cash and as of the period ended Q311, it exceeded last years outflow by P1M.

Normally, we want cash flows from operations to be positive. This means that the company operates and able to provide needed cash for it to continue. Nevertheless, the revenues of the company grew by 24% at the end of the third quarter. Given that the fourth quarter results were not yet released, we expect the company to report more than 24% growth in revenues. 

Gross Profit Margin is down to 40.74% compared with last years 44.71%

Net Income was also down most probably due to lower gross margin and higher operating expenses. Profit Margin on Sales was just 22.68% for the period ending Q311 while the company was able to report 33.14% last year. Profit Margin on Sales can be interpreted as the centavo earned for each peso of sale after deducting all the expenses.

Return on Assets and Return on Equity were down as well. This is not entirely bad news because one factor for these returns is the total assets and investment of owners. Assets and investment by owners increased thus dragging the ratio down.