minority,
As you try to spin more LIES to cover up previous LIES, more questions get raised!
Questions, questions, more questions!:
1) They are positive after gov contribution. Then there are tax.
Oh really?
Why gov contribution (akin to shareholders' fund injection) is considered "income" in PUB financial statement?
2) With reference to (1),
could you point us to any listed company in Singapore where they include shareholders' fund injection as "income" in their financial statements and then need to pay taxes on these fund injection?
3) And then there is GCF taxes.
Could you point us to any listed company in Singapore that needs to contribute to GCF taxes on top of corporate income taxes?
4)
Why PUB needs to spend $4 Billions over next 5 years?
Now, according to the news, read here:
http://www.straitstimes.com/politics...t-depreciation
It said that "PUB intends to invest $4 billion on additional water infrastructure in the next five years."
Ok, so Capital Expenditure (CE) is $4B needed over 5 years means they need $800M cash p.a. to cover the expenses.
First Question: why need so much over 5 years?
Don't forget, PUB only has $6.8B of "Property, plant and equipment" on Balance Sheet accumulated over past >50 years (or an average of $136M per year if you assume their expenditure on capital expenditure (which forms the "Property, plant and equipment" on balance sheet) is the same every year over the past 50 years)!
Suddenly they need to spend so much over 5 years, which costs about 58.9% of $6.8M "Property, plant and equipment" that they had accumulated over >50 years?
Like that is seems that they can spaced out the capital expenditure over say 10 years or even 20 years right?
5) PUB has not increased water price for past 17 years, BUT
PUB has been making lots of CASH money for past 17 years!
To find out how much CASH PROFIT they made, Let's dig out some FACTs - Look at the Net Operating Cashflow before Working Capital Changes (NCFBWCC) (Note that this is before including the Government Grants!)......
For YE Mar 31 NCFBWCC Gov Grant Total Cash available for CE Total Cash on Balance Sheet
2016 $303.8M $270M $573.8M $830M
2015 $302.2M $277M $579.2M $780M
2014 $292.5M $296M $588.5M $1089M
2013 $300.8M $216M $516.8M $889M
2012 $284.3M $199M
2011 $466.8M $185M
2010 $503.7M $185M
Above You can refer financial reports from here:
https://www.pub.gov.sg/annualreports/
You may ask: Why look at "Net Operating Cashflow before Working Capital Changes" and not "Net Income"?
Well, when you ask this question, it obviously shows that you are ignorant about accounting!
Net Income includes deduction for "Capital Expenditure, Amortization etc", which are not real cash expenditure made during that year! They form what is called "Accrual Accounting"!
If you want to know what are the Cash Profits available for spending on additional capital expenditure etc, obviously you look at NCFBWCC, which are the cash they can pocket (without minusing the Capital Expenditure etc which has already been paid/spent YEARS ago using CASH the company previously owned/has in their account!)
So, you can see that PUB has been making HUGE CASH PROFITS (Net Operating Cashflow before Working Capital Changes (NCFBWCC)) over all these years up till 2016 before adding Gov Grants!!!!!!!!!!!!
6) Note that
PUB has been making HUGE CASH PROFITS despite paying out money again and again to buy more assets from the government (and depleting its cash hoard). Why don't you point us to their annual report like below (in PUB financial report FY2014):
"
On 1 July 2005, PUB took over the used water business and purchased its operating assets (S$1.2 billion) from the Government."
"
FY2007: Other Current Assets = S$2,573,070" - "PUB’s prepayment for purchase of Changi Water Reclamation Plant in FY2009."
So,
PUB has paid the goverment $3.77 BILLIONS over past 12 years to take over some assets (owned by Government)! (I don't know about how much PUB paid the government for assets before 2005 as I don't have financial data earlier than that).
7)
With so much CASH PROFITS, why PUB don't just raise funds through BONDs since they have so much CASH PROFIT to pay bonds' interest?
Even then, PUB could raise funds via issuing bonds and pay interests to finance the capital expenditure, since don't forget, they are earning ~$300M in CASH every year! Why they need to pocket so much CASH?
Even then, with Gov Grant, they have >$570M every year to spend on capital expenditure!
Now, assuming that water prices increases by 30% by 2018, what will their cash profits be? We should be able to make an educated estimate:
For YE Mar 31 Revenue NCFBWCC
2016 $1,201M $303.8M
Additional revenue of $360.3 will fall to cash profits.
So, now PUB will earn say:
2018 $1,561.3M $664.1M
Now, after 5 years, when the capital expenditure needed has been spent, PUB will still continue to earn about $664.1M of CASH profit! So what is PUB going to do with their HUGE CASH PROFIT?
Are they going to return these money back to the Singaporeans?
What say you?
If not, is there a real need to rise water prices?
Well, NOT WHEN PUB is still MAKING SO MUCH CASH PROFIT (before Gov Grant) right?!
Or they can raise all these money through bonds, since for YE 2016 Mar 31, PUB only has total debt to equity ratio = (2796M) / (5145M) = 54%!
If you look at other big companies, e.g. Olam (majority controlled by Temasek):
Olam in FY2016 has total debt to equity ratio = (17,835M) / (5,634M) = 317%!
Now, if PUB raises their total debt level to 317% (like Olam), they would be able to borrow additional = $(3.17*7941M) - (2796M) = $22,377M, i.e. they can easily sells BONDS up to $22.38 BILLIONS!
Hei, if you add in the cash, that is MUCH MUCH MORE THAN the $4 BILLIONS capital expenditure money needed by PUB over next 5 years!!!!!!!!!!!!!
8) So,
What is PUB going to do with HUGE CASH PROFIT of $664.1M per annum they are earning 5 years later when they have no need to spend so much CAPITAL EXPENDITURE any more?
9) Why should raising awareness of preciousness of water and encouraging water conservation and efficiency become an excuse for PUB to earn even more PROFITS from Singaporeans (akin to "milking" Singaporeans)?
10) So honestly,
are they going to cut water prices and return the HUGE CASH PROFITS to Singaporeans or they are going to keep them 5 years later?
Ha ha ha! Caught YOU again!