Ann: COVID-19 Trading Update, page-16

@gragou02 ,

Based on the few "untidy" results reported so far from a few small companies in which I am a shareholder (BRG, GUD, KOV, SNL), the upcoming SDI result is likely to be messy to the point of being almost meaningless, I fear.

Besides the deferral of demand, there will be the dis-economies of scale from sub-optimal manufacturing, the likelihood of increased distribution costs [*], possibility of bad debts, offset to a degree by Jobkeeper payments and lower fixed cost overheads due to dramatic cuts to salaries of senior management.

So plenty of moving parts for certain, which means the result could come in as any number.

But whatever that number is, it will not have much bearing at all on the fundamental value of the company... even though some elements of the market will act as though it does.


[*] When it comes to assessing economies and industries, one never stops learning: one of the many things I've discovered I never knew is just how much non-bulk, commercial freight travels around the world by catching a ride on passenger airlines. It's huge number, percentage-wise. On a Revenue per-kilogram basis, passengers massively subsidise parcels and boxes. Now I know why airlines are so stingy with passenger luggage limits. With international passenger flights having gone to virtually zero, the unit freight costs for an exporter like SDI will have risen dramatically.