H! Report due 23 Feb, page-30

PinchOfSalt

As the quantum of the insurance payout was unknown when the accounts were published, the insurance claim was simply ignored in H2FY16. The $2.5m agreed to and received will be accounted for in H2FY16.

The two matters, insurance and the hard rock contract variation still under negotiation were said to have impacted H1FY16 NPAT by $6.3m, which translates to $6.3m/.7 = $9m. We can thus infer that the hard-rock matter has a value of $6.5m before tax. The expense incurred has been picked up in the usual way (something along the lines of debit expense, credit cash). I doubt if any revenue provision was made in H1FY16, so whatever is agreed should also be accounted for in H2FY16.

The worst-case outcome is that BYL only gets the $2.5m insurance, and the best-case outcome is that it also gets agreement for $6.5m hard-rock claim. Hence, the two matters should impact H2FY16 as follows:

Revenue ............................. $2.5m - $9.0m range
Profit before tax ................ $2.5m - $9.0m range
NPAT ................................ $1.75m - $6.3m range
Intrinsic value per share ........ 1.4c - 5c range (there are 126.5m shares)

The hard-rock matter is under negotiation, and BYL is supplying whatever is being requested to support its claim – business as usual for Civil Works contracts.

I would be happy to be corrected on the foregoing. A good outcome of the hard-rock matter should give the SP a fillip.