red flags in cccs annual report

Below are my notes from the accounts with all opinions removed so as not to be moderated. Subsequently the company appears to have responded saying that Penn will generating $15m of cash flow in the next financial year. We have had this type of guidance from CCC before and its often useful to heed the warnings that usually come with these forward looking statements. Regardless, it doesn't say much about sustainable cash flow, or the equity value of Penn given its based on $118 hedge price with current export coal prices in the early $70s.

- The operating cash burn is already bad at $10m, coal prices are now lower and Ferreira is finishing production in November. (Kiwi had got that one right). A chunk of the provision for rehabilitation of Ferreira which I have talked about in the past being more than its worth, is now current. $3.8m to be paid in the next 12 months.

- The royalties payments due are up by $2.0m to $10.6m. $3.6m current. Unfortunately that is a hold co obligation in my view.

- $18m debt is now current. That may end up being paid out in shares one way or enough. The $15m standby facility which I was always suspicious about is now described as a standby line of EQUITY funding.

- The non core assets that were supposedly for sale are being written down. I glanced through report, but no comment on selling those now?