re: Ann: Market Update - Management Rights fo... EBIT for the managed orchards has been running consistently at around $25m to $27m over the last 3 years.
There's a touch over 5.5k hectares of orchards under management that are unaffected by the failure of TIM. The 29.5k hectares of orchards purchased by Olam will have had their margins squeezed as a result of the renegotiation of the contracts.
My personal guess is that we should be able to still get around $15m EBIT from the managed orchards.
The current share price is undervalued at these levels.
A drag on the current share price at the moment is the TIM owned share overhang, the expectation of a capital raising to fund the WA expansion, uncertainty over the level of profitability going forward, umm, I'm sure I had another issue but can't think what it was.
I think we should see a re-rating following the half yearly results.
Ann: Market Update - Management Rights for Olam O, page-13
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