Wednesday, 27 October 2010

Gulf Finance House 3Q10 Financials: GFH Continues to "Turn Corner". But Unfortunately Into Oncoming Car

Not sure how GFH will spin this, but they've announced a loss of US$115.1 million for the 3Q10 making the loss for the first nine months of the year US$162.8 million.   And, no, the optimistic US$134 million of reimbursement rights remains on the balance sheet.  So this loss is due to other problems,.  The reimbursement problem has yet to be acknowledged - which means of course that GFH is in a "world of trouble".

As a result, Shareholders' Equity is at US$303 million, well below the US$400 million TNW covenant.  As well as breaching the Central Bank of Bahrain minimum  CAR requirement.

More later when I have time.

Footnote for the Central Bank of Bahrain.
As usual, GFH has released the absolute minimum on the BSE, while releasing its entire 3Q financial on the DFM.   It's unclear why Bahraini investors should be disadvantaged.  Perhaps time to revise the regulation to require that if a firm is required to disclose more on another exchange, then it disclose the same on the BSE.

I will make no comment about the ethics of a firm that engages in such selective disclosure, particularly one that claims to follow the teachings of a noble religion.

1 comment:

Anonymous said...

couldn't agree more. as put so eloquently by metallica: "then it comes to be that the soothing light at the end of your tunnel, is just a freight train coming your way"