UE EC explained on doubtful debts allowance

In my previous journal, l have noted that UE E&C did not offer explanation on the increase in Other receivable provision by $3.2 million.

Now and finally, SGX queried UE E&C on this matter.


 SGX Query:
(a) We note that the Company made an allowance for doubtful other receivables amounting to $3.49 million for FY2011, representing an increase of $3.19 million as compared to FY2010. Please provide more information on the debtor and reasons for the allowance made.

Company’s response to SGX Query:
The allowance for doubtful other receivables comprises mainly allowance for claims and expenses recoverable against sub-contractors mainly for work done and/or materials paid on their behalf, relating to various projects completed in previous years. In respect of those past due claims whose recoverability is deemed doubtful and for those under liquidation, allowance has been made in the current year.

I am still wondering :-

1. timing - why was this $3.2 million of doubtful debts allowance not been made known when its nine-months results released on 8 Nov?

2. assuming that the allowance on doubtful debts are on the sub contractors receivables which are more than a year old then how much more debts owing by these failed sub-contractors in the past due buckets of say, more than 90 days but less than a year?

3. let's hope that this big increase of doubtful debts allowance is not making another appearance in current financial year otherwise, would it not be more efficient to consider factoring service on those other receivable which are riskier?

In my same previous journal, l have expected its share price to go higher; and it has now boomed past its previous 52 weeks high and its share price is now currently in an unchartered zone.  It should be heading towards $0.60 and above soon and after that it  should be resting and stabilise in the $0.50 - $0.60 range when current bull market ended; whereby it could be a good accumulation range for its next climb, in the next bear market  recovery of course.