It was disclosed earlier that 4 boxes are needed to breakeven the operations – that’s a point where return to shareholders is NIL. This makes sense to me as follows
4 boxes with an average cost of $4M = $16M
If debt funded, 12% interest would be $2M in interest each year. (Assumption)
Income from 4 boxes would be ($700k*4) $2.8M, after accounting for op ex.
Income net of interest is $800k, which is eaten by salaries and other overheads. This leaves nothing for shareholders.
This scenario will never payback the debt of $16M !!!
(Figures based on past ERJ disclosures, predominantly pg.5 of 1/06/2012 announcement)
Yet, again the announcement to be released should reveal itself. Waiting ...
Above analysis is fully based on my own assumptions and not intended to provide any financial advice.
how willl this company make money, page-4
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