Companies try to find excuses for poor earnings results to mask the failings of their sales departments. In the US, snowstorms or heatwaves are often named as the reasons for sluggish earnings, when the real problem often lies in the clouded heads of their senior management. In Singapore, where the weather rarely deviates from tropical heat, companies have not had the dubious benefit of similar excuses. Until now. The smoke haze blowing across the Straits of Malacca from Indonesia could well be just the ticket to explain away poor results. How many companies will dare to use it?

Earnings season starts in earnest this week and the haze will not likely have had an impact on their quarterly results ended September 30. But if they have noticed an impact in the new quarter, then the onus is on them to say so! Questions will be asked of companies which don't provide such guidance when they report earnings in the coming weeks, but which lay the blame on slumping sales and profits on the haze when they report their next quarterly financial results in 90 days from now.

Clearly there are examples of companies which will obviously be affected, such as the DHL hot air balloon currently offering rides to view the skyline from Beach Road. Aerophile says business has been badly impacted.

Lifebrandz, which runs the popular nightspots of Ministry of Sound and Hed Kandi, an alfresco bar which can seat 180 people, might see lower turnout, because people choosing to spend quiet weekends at home, as reported in the Straits Times, than patronise these places.

But what's the bet other companies with far more tenuous links to the haze will claim force majeure. After all, most companies publish in their earnings statements about their outlook that 'barring unforeseen circumstances, they expect...'. Will the haze be an unforeseen circumstance in this case, particularly when companies start reporting about the current quarter?

There are, of course, companies which will not be impacted negatively by the haze at all! On the contrary, they will benefit. These companies include Osim, which sells air filters alongside their popular massage chairs.

Our award for just-in-time public relations goes to the folks at FinancialPR, which posted this doozy on behalf of Best World International.

The first paragraphs sounded like a market-moving corporate disclosure alright: "Best World International Limited, ("Best World" or the "Group"), a company specializing in the development and distribution of quality health and lifestyle products for its regional direct selling members has increased its marketing efforts to educate consumers about the benefits of negative ions, especially in view of the current hazy environment."

But the rest was a pure sales job, starting with the very next sentence: "Being compact in size and light in weight, the BWL Negative Ionizer is elegantly designed to be placed either at home or in the office."

The - wink wink - "disclosure" ended with the tip that:

To inform the public about the benefits of the Negative Ionizer, Best World frequently hosts workshops in its HQ premises at Level 15 East Wing Toa Payoh HDB Hub. Members of the public can contact BWL hotline at (65) 6342 0888 or visit http://www.bwl.com.sg for more information on the Negative Ionizer."

Now, it's understandable Best World will want to make the most of the hazy weather to boost sales.

One just wonders whether the corporate disclosure page of the SGX website is the right place for it.


Mark Laudi