Yeah it's confusing. The air freight surcharge that is seperated out is the ADDITIONAL costs due to Covid. So in the figures used by Tassal, they have EBITDA margins that include normal freight fees, and the Covid-induced additional freight fees are seperated out under 'significant items'. So figures of Tassal revenue vs World Bank FOB are comparable because our additional freight in Australia is largely due to lock-down rules, whereas costs are elsewhere from Europe/US were not as materially affected. Does that make sense?
If it doesn't make sense, it's because Tassal's should be reporting all the air freight costs under EBITDA and not significant items.
For the inventory point you made above, 2000t-2500t is about the working level required. So the freezers can store ~7000t. Around ~2000t is required for working operations (when harvests are a bit down but they have commitments to supply to the domestic market, they need some stock on hand). And Tassal is keen to get it back to the working level as per the previous comments. So that's where our difference is coming in the volume. For the EBITDA margin, your figures seem high - maybe triangulate it with 2018/2019 figures when the export price was similar, and see what the EBITDA margins were then? Off the top of my head I don't recall them ever being as high as $5 before, and I think in 2018 it peaked at around $4. The pre-significant-item-air-freight should be similar to those market conditions.
TGR Price at posting:
$3.50 Sentiment: Buy Disclosure: Held
