In this morning’s preview, Inderes quite rightly highlights Pallas Air’s acute cash crisis, noting that net debt and short-term liabilities have risen to an unsustainable level relative to the company’s debt-servicing capacity.
But in my opinion, this leads to an even more pertinent question:
How did we end up in this situation?
The preview focuses on the wind-down of the face mask business, the cost structure, rental expenses in Espoo, and the financing of the new AI/robotics strategy.
However, in my previous post, I brought up the Genano entity, the financing arrangements related to it, and the question of how several years’ worth of maintenance-related revenues and corresponding future obligations have been recorded.
Inderes also notes regarding goodwill write-downs that they have no cash flow impact. Precisely for this reason, I believe it would be justified to examine the other side as well:
through what arrangements has money entered and left the group in previous years, what liabilities have arisen in connection with them, and are these liabilities properly reflected in the financial statements?
The acute cash crisis is a consequence. From an investor’s perspective, it would also be important to understand its genesis.
Hopefully, Monday’s half-year report will provide more visibility into this.