Design Studio Group LTD 1Q FY19

21168504 l

From Hero to Zero

Formally a Company that makes millions of profits and now millions of loss. The company was barely profitable in 2017 and made losses in 2018.

In 1Q 2019, it made losses of S$ 6.193 mil. In the whole of 2018, the losses were S$26.4 mil. 1Q 2019 made up 23.41% of 2018 losses.

design studio 1
DSG Annual Report 2018

From 1Q report, the group took in revenue of S$15.4 mil but after expenses, the group is in loss of S$6.1 mil.

If we take revenue S$15.4 mil and minus from the expenses, the group is left with S$52,000 as profit EBITDA. Other expenses of S$4.785 mil further hit the group and brings it to negative profit. The cash flow on hand is left with S$11.3 mil. If the next quarter, the group don’t clock in extra revenues, I think we will see negative cash flow.

design studio 2

Point number 8 in their financial report reflect how badly the company is in currently. Even thou their international BU has an increased revenue of 87.7% but the revenue generation was lower than anticipated due to some project delays in 1Q2019. I think this point is valid as most likely the revenue will start to come in when the project is at near completion or completed.

design studio 3

Personally, I felt that this stock has lost its previous glory and on-road towards a loss-making company. This quarter 2Q is critical to the group as their cash is drying up.   

Author: The Financial Guy

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