PC of the Tanami project is good news, along with Zenith winning another project being the Kirkalocka contract, but one has to wonder what is the future of Zenith Energy.
I'm far from any form of financial expert, but having a brief look at similar companies in the same industry and one glaring item is very event, even to a layman such as I, that being the payments being made to the executives of Zenith in comparison to those of other such companies.
Given that Pacific Energy is somewhat larger than Zenith, I would have expected the salaries to be greater than those of the Zenith exec team, however, going from the two companies releases, this is FAR from the case.
I've tried to insert a comparison table here but can't seem to be able to do it, so I'm going to execute the old age excuse and type it in.
The below is pretty much what I came up with.
PEA Zenith
MD $587k $738k
ED $290K $798K
CFO $184k $476k
COO $0 $730k
Total $1.06M $2.74M
MKT CAP $230M $80M
EBITDA $31.3M $18.22
REVENUE $68.1M $51.43M
ASSETS $316.1M $75.94M
CASH $35.9M $1.99M
DIV's $0.025 $0
That is over $2.7 million for 4 peoples wages, nearly triple that of PEA, a much larger company.
It also begs the question as to what is the rest of the company drawing for their wages?
As I said, I'm no genius here, but given that the Zenith shares have not really done anything like what the amount of gaff that is being dealt out would suggest they should be doing, I have to ask why is the exec team being paid such ridiculous money, for as I look at it, it just isn't justified, sure, they've just one a small contract, but how exactly are they going to be funding it?
Whilst Doug Walker is known in the small power station industry, the same can't be said of the rest of the team, I've tried looking up the CEO and CFO and can't find much of anything related to power experience, but apparently they were involved in a dry cleaners once upon a time, this is not to say that they need to have power experience to operate Zenith Energy, but as it's a small company, I for one would have assumed that they would have some type of background experience.
On top of the wages concern, Zenith also have some of their larger contracts fast approaching end of life, chances are that they may well retain them, but nothing is guaranteed and it's very much a dog eat dog world out there.
For me, I'm happy to have made a few dollars from them as I was lucky enough to get in while there were around the $0.60 mark, but I really can't see there be much of a future with them long term, so have bailed and will be putting the dollars elsewhere, and whilst I wish them nothing but good fortunes, I just don't feel that they will go the distance, not while they are paying themselves so much money, and offering no dividends to their shareholders.
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