Frontier Digital Ventures Limited

ASX:FDV

Frontier Digital Ventures Limited

ASX:FDV
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$0.390 (-2.5%)
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#62
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24
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Reports (10) My Report Forum Investors
Forum Topics FDV FDV Q2 2024

Pinned straw:
lastever
Added 4 months ago

This seems fine. Cash flow positive across all regions. EBITDA up 10% PCP.

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As Shawn discussed in the last interview, there's some technology consolidation going on in the background which should pay off later.


lastever
Added 4 months ago

Oh well one kind of EBITDA is up, the other is flat. I'll defer to an expert by quoting @Slomo from a few months ago, thank you sir. One day I hope to fully understand what this means -

"FDV won't screen well statistically for a few reasons.

1) They have a mix of partly and fully owned businesses so they have to blend consolidation and equity accounting. This adds complexity to the analysis, if not the business. Management present their reports to accomodate for this as both Statutory to break down the reported numbers in detail and, Also on a 100% owned basis, to show the underlying performance of their portfolio."

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Slomo
Added 4 months ago

@lastever yeah, that was a bit jargon heavy, let me try to explain each piece. At the risk of over doing it ...

Won't screen well statistically means if you put it through a screener like Stockopedia, etc, the numbers alone - statistics (eg. Ratios like P/E) may not look cheap relative to market.

The Part & Fully owned businesses require different accounting treatments under IFRS (Accounting standards). You fully consolidate any subsidiaries that are 100% owned, so it's effectively just a department of the business and gets treated like any other department / product that's part of the business.

From Investopedia, "The equity method is typically applied when a company's ownership interest in another company is valued at 20%–50% of the stock in the investee."

So the Zameen (Pakistan) holding being 30% means they need to Equity account for that investment, while they would consolidate the LATAM business as these are all 100% owned now.

In a nutshell this means you are mixing apples and oranges due to an accounting requirement so you're not able to observe the underlying operational performance of the business by just looking at the consolidated financials as you would for most businesses.

Except that FDV show you both the statutory numbers (mixed treatment but required by accounting standards) and the operational numbers (as if all businesses were consolidated) - usually in the HY & FY Reports, not quarterlies.

Disc: Held

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