DOW downer edi limited

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$6.84

Ann: Update on Christmas Creek Contract,FMG-DOW.AX, page-4

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clearasmud

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06/04/16

12:53

Post #: 17435088
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Originally posted by MarkieMills ↑

Problem is that the mining div has been making an EBIT margin of about 8%, while the rest of the business is around 4%. So two units of "other" revenue equals one unit of mining. Minings EBIT has still been around 40% of the bus, but every time a big contract is lost you end up with a lower EBIT margin as overheads either become a higher proportion of the revenues, or you get critical mass issues that can effect the ability to win or maintain other business if you cut overhead costs.

Saying that - the rail div has a decision coming soon for the big $2.8b nsw intercity. Although the Waratah project was a hopeless debacle, the public have apparently been impressed by the trains that were delivered late and over budget - so I guess they may still have a 25% chance as 1 of 4 contestants.

Not implying this loss of contract is a massive surprise. I shorted it yesterday for a quickie.

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The divi won't be at risk as they will be flush with cash from the equipment payout?
The Christmas Creek EBITDA margin probably was crap anyway to keep the contract from Macmahon.

DOW Price at posting: $3.40 Sentiment: None Disclosure: Held
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Last $6.84		Change -0.020(0.29%)		Mkt cap ! $4.593B

Open	High	Low	Value	Volume
$6.85	$6.88	$6.70	$5.355M	783.9K

Buyers (Bids)

No.	Vol.	Price($)
1	450	$6.80

Sellers (Offers)

Price($)	Vol.	No.
$6.84	5638	3

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No.	Vol.	Price($)
1	450	6.800
1	2242	6.690
1	40	6.650
2	2465	6.620
1	410	6.580

Price($)	Vol.	No.
6.900	53	1
6.920	2387	2
6.960	1420	1
6.980	1000	1
6.990	4570	2

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Ann: Update on Christmas Creek Contract,FMG-DOW.AX, page-4

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Ann: Update on Christmas Creek Contract,FMG-DOW.AX, page-4

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