Effective communication is key — be it to deliver good or bad news. Media Chinese International Ltd (MCIL) issued a profit warning recently that it may record a net loss for the financial year ended March 31, 2019 (FY2019).
It provided details for the profit warning, blaming the expected weak results on a provision for the impairment of goodwill of about US$15 million (RM62.55 million) in relation to a business unit of the group.
The information provided was based on a preliminary assessment by the board of directors on information available at that time.
While it may be bad news, it is good communication by the company in giving investors up-to-date information and managing expectations on the upcoming quarterly results. This will ensure little or no surprises when the results are officially announced.
The stock fell one sen on May 15, one day after the profit warning was issued, but it has since climbed back to 19 sen — the same price at which it started off the week.
Meanwhile, Pasdec Holdings Bhd announced recently that the release of its FY2018 annual report had been delayed because the audit of its South African subsidiaries, Pasdec Resources SA Ltd (PRSA) and its group of companies, had yet to be completed.
Trading in the stock has been suspended due to the delay in releasing the annual report.
Why has the audit of its South African subsidiaries not been completed? Should the company provide more information on the reasons and when the report is expected to be ready? After all, keeping investors informed is crucial.