notes on a couple of things
In relation to building brilliance
Its quite objectionable imo that they associate the cost of this program as a significant item and then write it back to present a higher " underlying profit".
Its a multi year program
reality is costs are up across the board, so clearly it isn't yielding savings to date
Underlying profit should exclude this item imo - so many BS things in so many sets of accounts.
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so 80628 less 22695 if you want to present a real underlying
so 57931 is truer reflection of underlying just on that transaction imo
108 to 58 ,(underlying adjusted for reality 2020 vs 2021) drop of underlying then approx 46%, adjusted for building brilliance costs
Its a bit like all the one off significant items you see in accounts, then you see them the next year for the same thing
NOW in relation to the one off significant wrtiedown - non cash 349 296 000
DID you spot it?
sure but you will see how much CASH was actually spent this year acquiring the asset impaired and how much last year
THEY SAID THIS on the 20th AUG - 6 days AGO! said max 300M, but delivered a writedown of 350M
the Company expects to incur a non-cash impairment in the range of A$250 million to A$300 million in its financial results for the year ended 30 June 2021 due for release on 26 August 2021
not only did you see writedowns - today they were delivered 49,296 MILLLLLION over what was guided less than a week ago
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Above you will see this financial year reported 62.176M of CASH WAS spent...but the writedown at end of year was after so its non cash.
So just rough excluding costs etc 842M cash spent on Atlantic acquisition and approx 349M written off
So roughly 41% of the capital spent to buy the project - written off
At the very least boys, deduct the cash spent in the reporting period from the overall significant item for a truer picture of your underlying
But of course they wouldn't do that at Underlying with building brilliance costs reclassified as significant items for writeback, (spend 22 M and watch costs increase- errrrr)
So for fun lets look at a more realistic underlying, the metric presented by most companies whi present bad results and think this metric will put the lipstick back on the pig
80 (underlying reported by them)
-22 (add back the building brilliance costs incurred in a multi year program to reduce costs)
-62 (add back of the cash component spent in the same reporting period the year end adjustment writeoof put through )
= a loss
ANyhoooo, more about BS reports and chopping them back to reality
these two items imo are worth a look imo
write back of building brilliance costs because its considered a significant item, when its multi year in the underlying profit calculation
Second related to monster writedown, but most importantly the MASSIVE difference over and above what was guided just six days ago...
guide 250-300M 6 days ago then deliver 350M - WTF
hence my thoughts SBM needs some new management and it remains a sell for me...
but each to their own - good luck guys
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