I don't follow HMY closely, and today was the first time I had dived into an actual result presentation since they listed.
The 19th January 2022 half year profit announcement on Stocknessmonster is titled.
"HARMONEY ACHIEVES CASH NPAT PROFITABILITY"
Granted this is only a half year result, so it probably wasn't audited. But quoting from the half year result presentation made on 28th February 2022, on the bottom of page 34, the bottom of the profit and loss statement presented, looks like this:
Profit Before Income Tax $1.624m Income Tax (@26.1%) ($0.424m) Profit After Income Tax $1.170m Non cash and other normalisation adjustments $0.0 Movement in Expected Credit Loss Provision ($2.730m) Share based payment expenses $1.467m Depreciation and Amortisation Expenses $0.714m IPO Expenses $0.0m Income Tax treatment of adjustments ($0.154m) Cash Profit $0.774m
If tax was paid, this would suggest to me that the profit was indeed real. One of the reasons I haven't been following this one was that, I thought the company was racking up massive losses while it grew, and it would take years before it got to the point of paying any tax. However, now I see HMY is actually paying tax, maybe I should give it more attention?
I can't explain why income tax only came in at 26.1% of profits. The income tax treatment adjustment to cash profits of $0.154m added back is an odd thing too.
If I add up all of the cash profit adjustments, excluding the income tax adjustment, I get:
-$2.730m + $1.467m + $0.714m = -$0.529m
Now examining the income tax adjustment in proportion:
$0.154m/$0.529m = 29.1%
That number is between the NZ company tax rate of 28% and the Aus company tax rate of 30%. So at least it sounds a ball park believable figure. Except the whole concept of a 'cash profit' sounds fictional to me. 'Positive cashflow' is a concept I understand. But 'cash profit' seems to be 'positive cashflow' with a 'taxation adjustment' which is not paid in practice, added back (?). I will have to leave it to the students of Harmoney to explain what is going on there.
I am not sure where that $5m pro-forma loss you mentioned comes in Snow Leopard. Could it relate to FY2021?
The blank slots in the above table, representing IPO costs that might apply to previous periods, and normalization adjustments of which there are none. This would suggest the HY2022 result is clean. No pro-forma adjusting required. Even if none of this answers the question of what happened to all the tax losses built up in previous years. Another one for the 'students of Harmoney' to answer!
SNOOPY