There seems to be a lot of talk about prepayments and why the gross profit should be higher...
Unfortunately, the gross profit is what it is because the prepayments and costs associated to meeting the pre payment obligations are not recognised in the profit and loss statement.
page 13:
View attachment 707763
The production of spod to meet the prepayment obligation actually resulted in a net loss of $1.7M but all good given the higher cost per tonne at the initial ramp up, and but is taken into account under the PPE category as a pre-production expense (ie: It's accounted there, and it is NOT accounted in the Cost of sales; thereby not in the profit and loss statement)
GXY has already said that they are now producing commercially from 1st may, and with 1 shipment at 13539 dmt, this gave a gross profit of $1.97M only.
Again, the cost of sales (by GXY definition) is calculated weighted average cost per tonne for that product sold (again: Only for that product sold).
View attachment 707778
Sure.. they shipped about 53590 dmt for half the year, but 13,539 was commercially produced and sold, while the other 40K dmt was to meet their prepayment obligations.
Again.. the cost of sales in the P&L is the portion of the costs attributed to the 13539 dmt only... else we would have seen prepayment costs ($32M) added in .. but it's not.
They lost money before 1st May producing for the prepayment obligation (ie: Lost $1.7M)
Basically, GXY looks like its making about $145 gross profit per tonne as of 1st May. (there are still other expenses not taken into account)
