Ann: Chairman's AGM address (incl. First half FY15 guidance), page-2

Not a great announcement from ALQ today. In fact it looks almost disastrous.

Unfortunately limited detail has been provided, but on my back of the envelope numbers ALQ's divisional 1H15F EBITDA is going to look like this:
Mining Services $50m vs $75m pcp
Life Sciences $70m vs $69m pcp
Energy $23m vs $27m pcp
Industrial $23m vs $16m pcp
Corporate Costs $8m vs $8m pcp
Group EBITDA $158m vs $179m

Whilst continued weakness in MS is not a surprise, the quantum of the fall in MS earnings is a concern.

However the real issue for me is the massive underperformance in Energy. Remember there was a two month contribution from Reservoir in ALQ's 1H14 result vs a full 6 month contribution in 1H15. Reservoir delivered US$55m in EBITDA in FY13, so the half year contribution should be ~A$30m. I know the Coal side of the Energy business is weak, but the above would suggest that Reservoir's earnings have more than halved since ALQ bought it 12months ago for a massive US$533m.

ALQ and its CEO, Greg Kilmeister, are 2 great Australian success stories. I am a massive fan of both. But the acquisition of Reservoir looks like an absolute dud!!

Unfortunately the Chairman's and CEO's lack of clarity around the divisional performance in todays AGM statements is going to raise more questions than answers. If the company is happy to give an NPAT number, why not give some clarity around divisional performance as well.

If my assessment of the drop in Reservoirs earnings proves to be accurate, ALQ is going to trade sub $6.