It’s
been awhile since I delved into the reading of annual reports. Last night I
decided to read reports of several listed O&G/marine companies in
Singapore.
Big losses
Undoubtedly
many listed O&G/marine companies were in dire straits and outlook ahead
were uncertain. There is no question that balance sheets of many these
companies are strained with piling debts. Liabilities exceeded assets with
limited cash to keep business going. Not to mention the reliability of the
“assets”, if they truly worth what it was stated. Auditors also raised going
concern doubts for many companies.
Many
companies had loses in 2015 & 2016 that cannot even covered what they had
been earning for the last 5 or more years during the hey days when Oil prices
were soaring. Loses can be as high as tens or even hundreds of millions per
annum for companies with market cap of less than 100 millions. Year 2017, which
was yet to be reported, is likely to be even worse.
Perhaps
it left us wondering where did these companies manage to get the cash to incur
the huge loses and yet still able to sustain salary packages and continue their
operation.
Big salaries
Due
to the bad results, cost cutting is often one of the inevitable measures cited
by Chairman and CEOs to weather the storm of the sector downturn.
Ok,
cut the salaries of CEOs, directors and top management then in proportion to
the company’s performance then!
Hmmm…..
a peek at the annual salary packages of many of these companies’ top management
reveals that most of them are all still drawing annual income at levels of
>250 or >500 thousands. Perhaps it is not much lower, if not even same or
even higher as during the good times before the oil crisis. Independent directors, who usually are acting
as advisors attending few meetings a year, are also still getting their fair
share of very good money.
Imagine
the top management trying to cost-cut those earning less than 50k p.a. and
making work life difficult for them, when they are still lucratively earning
500k yearly, and may still traveling on first or business class flights on
company expenses.
Isn’t
the top management the ones who are responsible for the profit and losses of
the companies? With the companies incurring far-fetched loses, yet those
responsible are still getting fat pay-checks, but squeezing and stressing those
employees who desperately need the paltry salaries to sustain their family
expenses.
The main culprits
The banks
are of course even worse and the main culprits who started all these in cahoots
with the CEOs. They were the ones who introduced the various debt instruments
and cheap money to the CEOs for expansion during the good times.
When
crisis struck and things got screwed, it is evident that on paper, companies
and banks suffered huge loses. Yet, these losses incurred for banks and
companies are somehow all paper money only. Individually, many of the top
employees are still filthy rich.
Oh…
by the way, the worst it can get is that banks and companies can always
introduced all sorts of complicated debt-restructuring programs to continue to
keep the companies afloat, cleverly “playing” time delay. Even if listed companies
were to undergo bankruptcies or judicial management, many of these companies
still keep the top management and pay them good salaries.
The material winners and losers
Regardless
of crisis or not, bankers who introduced the various debt instruments still get
their lucrative commissions. CEOs and top management still get their fat
salaries. Even many major shareholders who lost lots of their “paper stock
money” were really not that affected financially, having already cash out
during the euphoric share price rise during IPO.
On
the contrary, employees who work their ass out, earning meager salaries get
stress up now or lost their jobs and struggled to pay their bills! Small
investors of these companies lost their hard-earn monies and cried foul.
The root of the roots
Of
course all the debt instruments have no chance to be introduced, unless the
governmental/regulatory authorities allowed them.
Remember
that during the crisis of 2009, many of the O&G/marine companies were not
that badly hit, primarily because they were not so indebted by all the “bonds
and MTNs”.
It
is all greed!
And going back to the source, perhaps it is not even the CEOs or
bankers, or bank CEO…. but perhaps the country herself. You can either call it “the
ambition of an aspirated accelerated economic growth”, or simply “evil
gimmicks”.
The scenario in the O&G
sector is merely a small warning and maybe even very mild in its evilness.
Consider
all those tech companies who have been making losses every year, all you need
is a good story for the fund managers or even governmental agencies to buy into
it, then the owner will be able to cash out, paying themselves good salaries using
public or agencies’ monies and the success story will continue.
Not complaining, just to bring
awareness
Anyway,
I am not complaining, and am never the kind who rants and complains. I just want to inform that this is truly the
world we are living in today.
And
a disclaimer that I am not one of those suffering in the above-mentioned
companies listed in Singapore. In fact the company that I had been working for
many years now, is seeing record high order intake lately that as a group that
we are really running short of capacities. It is definitely a unfamiliar situation considering that in 2015 and 2016 we are also laying off hundreds of people as a group and significant retrenchments in Singapore also. Please accept that I am not boasting of the fortunate situation my company is experiencing now, but instead I am sincerely humble and grateful. All is by the grace of higher powers maybe, lest anyone should boast and claim credit?
Somehow this article is to bring to the awareness that it is quite ridiculous how this world has become, chasing the material aspects of life, especially in affluent city like
Singapore. And people are becoming more and more selfish, self-loved and
self-centered, always only thinking “what is it for me?” or “what can I get out
of it?” rather than how can I help the needy looking at their root problems? Undoubtedly the rich are becoming richer,
and the poor, poorer…the evil becoming more evil, and the righteous becoming
more righteousness still (hopefully).
Final thoughts
Although
it is totally unsurprising for me that this kind of unrighteous ethics is going
to be more commonplace or even more wicked as time passes, it does disgust me a lot to continue
reading on the annual reports, last night. Haha…
So I
stopped reading the reports, and this also contributed to one of the reasons
why I am blogging lesser nowadays about all the stocks and the material aspect
of life. Material wealth and power of this world after-all is temporary and will just disappear once
your time in this present age ended. So why are we spending so much time on it anyway. I did chase that a lot once upon time and are glad that I see the light now.
Are you now still chasing?
Instead
I am concentrating more on the true wisdom in life, which is making the most
out of life, rather than making lots of money. It is about impacting and
changing lives of people around me with the true purpose of our existence.
You may not realise. The more a person becoming more selfless in a wise manner, the more eventually all the things will fall in place peacefully. It includes relationships with families, friends and in work place and even your finance will miraculously fall into place, lest you even keep focusing on it.
Enough
said. If you are reading this article till now, I am truly thankful. May you
and your loved ones be blessed with true love, peace and joy, and keep on becoming
more and more righteous and selfless, making the most out of life.
Oh yar.... this is my first blog article in 2018. Happy New Year to all the readers and have a splendid 2018 and beyond ahead.
