I think what Pardner is refeering to is: low ROA, and...

I think what Pardner is refeering to is: low ROA, and (relatively) high debt


http://www.travismorien.com/FAQ/shares/wbroe.htm


http://basehitinvesting.com/1987-berkshire-letter-and-buffetts-thoughts-on-high-roe/


sometimes - if returns are low, then the assets are not worth book value....

Having said that - 2+yrs ago (pre jaya) pre-tax NPAT was in the 70m +/- range ......

the key question (s) for me is:
1. within the offshore industry - what needs to be removed for the excess capaicyt, so that day rates (and hence profitability) return to "more normal levels".
2. if there is a write-down (high probability) - how does this affect the interco-loan that funded jaya, and does the "equity value" of a sub create any financing or liquidity issues for the parent co.
3. timeline for any eventual rebound in oil prices (plus the customary delay for expl / development activity pickup).......


imho - this is a leveraged play on rebound in oil prices. I don't hold due to financial risk. I do hold a "few" oilers.

I look forward to the results release.

rgds
Value_Hunter