You also have to evaluate the carrying value of your asset. This I would suggest would be to look at the income earned and other ramp-ups from the past and see how long and what cash it takes before you are able to break-even and make a profit. In addition you may have to write down the asset because of this exercise. A lot of infrastructure assets have had to do this in the past 18months.
Until it opened it was an intangible asset. What is is worth. It has to service the debt say around $65m and running costs say $20m so $85m @$4.00 per ride roughly 58000 per day yes lower if trucks etc. People were saying it was full @60000 so where the scope for return on investment. Its at 27000 and ramping up but the economy doesn't look too flash right now so will it get there in 2 years?
I dont know but looked hard at it and said wow the PDS said that initial rates would be 60% of steady rate. So if I am generous and say 27000 initial paying rate than expected usage could be 45000 thats just not enough to service this beast. The gap is 13000 @4.00 thats a heap of cash flowing outward each year.
If this process was so open how come the company has not compared actual usage to the base case model of the experts in the PDS and shown this to the unit-holders. I think they dont want to but surely for the audited results they would have to to prove valuation and write down of asset if necessary.
Do some research the PDS is no longer on the website but if you go through the announcements it is on the asx website.
RCY Price at posting:
5.0¢ Sentiment: Sell Disclosure: Not Held
