Looking at the preliminary results released on 01/09/2015 two problems come to mind:
1. Hughes capitalised circa $23m most of which is plant and equipment . Am guessing drill rigs.
I don't think this all relates to purchase of new drill rigs. Most likely repairs and maintenance of existing rigs. Capitalising of R&M is a very judgemental area. My educated guess is the auditors don't agree and want proof. They See these as opec and not capex. An adjustment would most likely reduce the preliminary profits already announced.
2. Hughes inventory balances seem to be increasingly steadily year on year. Don't quite understand why considering the current economic climate. Most companies seem to be using up what they have to save cashflow.
Something does not my smell right. How hard is it to put together a set of financials unless the auditors won't sign off.
HDX Price at posting:
13.0¢ Sentiment: Sell Disclosure: Not Held
