{ "docId": "019dd923-622c-750b-8b96-063645a867ac", "docSlug": "ad39e81239e4", "documentTitle": "Olam International Ltd. (SGX:O32)", "authorId": "51_Muddy_Waters", "authorName": "Carson Block", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2012-11-27 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 64, "pageCount": 133, "prevPage": 63, "nextPage": 65, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 6, "notes": "Includes a quote from Randal Rahal regarding SK Foods.", "elementsJson": [ "paragraph", "quote_block", "bullet_list", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b96-063645a867ac/64", "deckHref": "/decks/019dd923-622c-750b-8b96-063645a867ac", "deckJsonHref": "/decks/019dd923-622c-750b-8b96-063645a867ac.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-063645a867ac#slide-64", "components": [ { "bbox": null, "kind": "callout", "text": "We recommend that investors disregard S$94.5 million (26%) of profit after taxes for the 2010 financial year (and associated shareholders’ equity) because it resulted from highly questionable negative goodwill.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-25b3-7229-befd-18d591018e4a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.8 }, "kind": "list", "text": "The Company's S$94.5 million negative goodwill gain resulted largely from valuing the PP&E at S$189.9 million (US$130.6 million). However, the SK Foods bankruptcy documents include a detailed schedule of assets, which report", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "feea8eba-27bc-4cd6-a4e1-adaf11147b31", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.74 }, "kind": "paragraph", "text": "This section will explain our opinion that Olam's acquisition of SK, although purchased out of bankruptcy, was not the bargain the company claimed it to be. The primary reasons for our contention are listed below.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0f6d3cd8-bd3d-4fbb-bcd7-abecae1d2328", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.12 }, "kind": "paragraph", "text": "Olam's cash flow accounting for CFM raises concerns about whether Olam knows how much cash it really spent on the acquisition. The issue with Olam's accounting is that it states it paid S$15.9 million more in cash than it seems it should have.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9c88b7a7-a02b-408f-a175-8dba4a8ff8d5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.46 }, "kind": "quote", "text": "\"We pack garbage for them anyway and they always take it, but we've hit new lows.\" – Randal Rahal, former Director of SK Foods (the predecessor to Olam Tomato Processing) on SK Foods prior to its sale to Olam.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4e4da458-a19d-4a0d-8e15-6e1f8e3e82bc", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“We pack garbage for them anyway and they always take it, but we’ve hit new lows.” — Randal Rahal, former Director of SK Foods (the predecessor to Olam Tomato Processing) on SK Foods prior to its sale to Olam.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-25b3-7229-befd-1ed301a673f9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.25, "x": 0.14, "y": 0.89 }, "kind": "source-note", "text": "Olam 2010 Annual Report, Note 11.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "54e4e0e9-8e08-4f5b-b979-09a1aa26275e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "title", "text": "Olam's acquisition cash flow accounting for the CFM raises serious concerns.", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "755c28bb-a6b8-456b-9e3a-49def44a8503", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.72, "x": 0.14, "y": 0.71 }, "kind": "title", "text": "S$94.5 million Negative Goodwill Gain from SK Foods is Likely Unjustified", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8ddf9b86-527e-4466-84a3-125d3ffcbdc3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.72, "x": 0.14, "y": 0.41 }, "kind": "title", "text": "You Say \"Tomato\"; I say Whatever I Want – sometimes Sayler, sometimes Salyer", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f333e7de-6efe-4ff2-abf7-438115b66e45", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 133, "from": 51, "beatId": "bfd56f27-9e0e-4a96-9fda-8bd5736531bb", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory", "beatSlug": "overcoming-monster-the-victory", "evidence": "Conclusion and recovery analysis", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }