Monthly Archives: May 2013

Financial Reporting Environment – Ref 2000M8Q6A – Exam Question Solution CIIA 2000

I’m in prepartion mode for the CIIA Autumn exam and came across the following question:

The profit before tax and the net profit of company SAX is CHF 80 million and CHF 55 million, respectively. If an exceptional expense of 12 million, which is included in the general expenses, is discarded from the analysis, the modified net profit amounts to: (4 points)


As there was no path to the solution I’d like to add it here:

The first step is to calculate what the tax rate is that company SAX pays.

(Profit before Tax – Net Profit) / (1% of Profit Before Tax) = % Tax Rate

(80 – 55) / (80 / 100) = 31,25 %

2nd step is to calculate what the tax paid on the 12 million amounts to:

12 * 31,25% = 3,75 million

3rd step is to deducte the tax paid from the 12 million

12 – 3,75 = 8,25 million

4st step is to add the 8,25 million to the 55 million

8,25 + 55 = 63,25 million = solution


Schaffner H1 2013 Results by Segment

Trying to analyze Schaffner by segment result is rather puzzling at first glance and only the accompanying press release can really shed any light on the reasons behind erratic numbers. Even though you have the EMC unit with practically unchanged turnover of over CHF 50m the segment result of CHF 4.5m, it is lower than in H1 2012 when it was CHF 5.5m. Based on the chart 1 ‘Schaffner by Segment’ I compiled, the fundamental increases in turnover should be a green light for an investment decision, but the disturbing thing is, that the profit doesn’t seem closely correlated to the results as can be seen in the chart 2.

Note: Schaffner is a largely illiquid stock, rather wide spreads (at the moment 213-215), in which information assymetries seem tilted against the retail investor.

Chart 1SAHN-H1-2013-SEGMENT



Holcim Q1 2013 Net Sales by Region

Holcim Net Sales by Region

It’s definitely not a pretty picture over at Holcim in the first quarter of 2013. Net Sales in every region are down. Asia Pacific (~-6%, -134m) and Europe (~-11%, -129m) are both down fairly substantially in absolute net sales in CHF, even though the strongest percentage fall was seen in Africa Middle East (~-15%, -36m). Best areas were Latin America (~-3%, -27m) and North America (~-8%, -37m).

Does this show us that the central banks printing presses may be inflating financial assets such as equities and bonds but not real world construction spending?

Panalpina Q1 2013 Gross Profit by Business Unit

This graph I compiled shows what is happening behind all the EBIT, EBITDA figures Panalpina published today. Which lines of business are doing well, which aren’t. Which are the most important factors influencing the key figures of Panalpina.Panalpina Q1 2013 Gross Profit by Business Unit

Panalpina’s Q1 results were saved thanks to their Logistics business unit, which among others things provides “Value Added Services VAS” that are sought after in the market. The gross profit YOY improved by a comfortable 13% there. Another positive was that they grew faster than the market in Ocean Freight. In fact they shipped 7% more containers (TEU) YOY vs just 2% for the market.

On the negative side Panalpina’s Air Freight business unit, which is the largest unit, saw High-Tech, Telcos and Chemical Industry clients pare back business, while at the same time seeing an improvement on the Consumer and Retail, Health Care and Oil & Gas front. The net effect was negative though. Gross profit per ton of air freight decreased by 5% YOY but increased by 6% QOQ.

Interesting side note: In the press release published today CEO Monika Ribar is quoted as saying “Ocean freight and logistics continued to grow strongly while air freight volumes were still soft.” If you look at the graph above, you may disagree that a 2% increase in Ocean Freight gross profit is described as “strong growth”. As the gross profit per TEU shipped sunk 4% YOY the 7% increase in volume didn’t fully hit the bottom line, which in turn led to growth which would more accurately be described as “slight growth”.