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  "documentTitle": "Olam International Ltd. (SGX:O32)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
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  "presentationDate": "2012-11-27 00:00:00",
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  "notes": "The slide uses a table to compare analyst estimates against management guidance to expose poor modeling practices.",
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      "text": "When analysts can't even copy Management's CapEx guidance, should investors rely on their other assumptions?",
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      "text": "Capital Expenditure: 1,700.0",
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      "text": "The dynamic analyst models we have reviewed generally are driven by Gross and Net Contribution estimates. Most of the models use hard-coded growth rates for product segment volumes, usually assuming that the underlying prices are constant.",
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      "text": "The real risk in not understanding Olam's CapEx is that the Company has S$3.75 billion in borrowings maturing in the next 12 months, is generally operating cash flow negative... and had only S$1.38 billion in cash...",
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      "kind": "paragraph",
      "text": "The issue with this approach is that GC and NC are fairly irrelevant measures because they exclude Olam's staff costs. Olam defines GC as total revenue minus COGS,",
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      "text": "When analysts can't even copy Management's CapEx guidance, should investors rely on their other assumptions? Below are FY2013 and FY2014 CapEx estimates by analysts at five banks. In addition to ranging greatly from one to another, they project FY2013 CapEx far below explicit Management guidance:",
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      "text": "So, we have, as of FY2012, spent S$4.4 billion. And based on the investments committed, an additional S$1.7 billion will be spend over the next 18 to 24 months to complete these initiatives. - Shekhar Anantharaman, Q4 2012 Call",
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      "text": "So, as far as the total CapEx is concerned, we had given you at the end of the full-year results briefing that we'll need about S$1.7 billion in the next 12 months. I think FY2013 plus probably another six months of FY2014. - Shekhar Anantharaman, Q1 2013 Call",
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      "text": "So, we have, as of FY2012, spent S$4.4 billion. And based on the investments committed, an additional S$1.7 billion will be spend over the next 18 to 24 months to complete these initiatives. — Shekhar Anantharaman, Q4 2012 Call; So, as far as the total CapEx is concerned, we had given you at the end of the full-year results briefing that we'll need about S$1.7 billion in the next 12 months. I think FY2013 plus probably another six months of FY2014. — Shekhar Anantharaman, Q1 2013 Call",
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      "text": "1 Olam Management guided to S$1.7 billion in capital expenditures over the next 18 - 24 months in FQ4 2012",
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