Ann: 2015 AGM Chairman and Managing Directors Address, page-6

@madamswer,

Yes, the assets will still be $200 M after debt is paid, but they will be plant and equipment in a recessionary sector and I presume, the most saleable stuff would be sold by then. Their EBITDA and EBIT have fallen to $17.9 M and $5.2M from $42.1M and $25.8M resoectively. What are the grounds for assuming EBITDA and EBIT of $25M and $10M then? A 12 yr average of 6% EBIT return is impressive, but that was still on an infrastructure investment fuelled China growth, which will not resume now. The federal and state govts are faced with falling tax revenues, so mega infrastructure investments are ruled out. The O&G industry is suffering from low prices and high costs, and their construction work is mostly done. Once the take or pay haulage and port charges contracts expire, a number of coal mine closures is on the cards. So, quite likely, the returns from operations could be piss poor. Assuming they make debt repayments of 30M a year almost entirely from asset sales, you will have a business that has a lot of P&E but falling revenues and profitability.

I am not sure how the assets are going to be converted to shareholder rewards if demand is poor in the business and profitability is low.