I think you are misreading the result. H1 results weren't much...

I think you are misreading the result. H1 results weren't much lower due to the Newhaul acquisition (they should have been higher but it doesn't appear that even the $10 / tonne C1 cash cost we were promised even materialised - I'll come to that later) but you say "the large tax bill" - what large tax bill? In fact their tax charge to the Income Statement is minimised due to the acquisition - as the "profit" is smoke and mirrors and only a result of large scale intercompany Intangibles (which IMO is ridiculous - the auditors need to be all over that at year end - those Intangibles should be eliminated, but then it would have looked like an awful result).

Lets look at the detail. I've pulled the last 3 quarters of data together in the table below.



Statements from JW are all fluff.

So for H2 2022 we recorded a C1 cost of $86.92. He rightly points out that the H1 2023 C1 is a 10% reduction from H1 2022, however this only equates to $9.27 / tonne. Whats more, the H2 2022 quarter averaged $86.92, so thats only a $5.67 / tonne reduction. Where is the minimum $10 / tonne reduction we were promised? Also, on top of that Fenix / Newhaul C1 was actually closer to $13 / tonne, saving to FEX, but we have less than $6 to show for it. Ouch, that acquisition looks even worse, despite the rubbish spin that JW is spinning. They even claimed that they were "starting to see the benefits" of the acquisition. Hold up, this was a simple acquisition that should have needed no integration to see the benefits, the benefits weren't synergies, they were profits absorbed into ours. If they are saying they only had a partial period benefit because the actual acquisition date was the 22nd July, then thats a joke. 23 of the 26 weeks were included. IMO those statements are condescending to shareholders. Anyone that can read a financial statement can see these are poor results.

Even the gain on purchase, is only because they have recognised Intangible assets relating to the FEX contract (hence why I said it should be eliminated - but it hasn't been), which is also why the tax bill is so low, as they have been able to take the "tax" from that gain and remove it from the calc as shown here in Note 9 - The non assessable income I'm pretty sure relates to the "tax" on the gain on sale. So that "gain" on sale will just be amoritised over the next several periods hence why this is smoke and mirrors. Highlight a profit now, and they will take it away in future periods.


Very, very disappointed in these results but more so the spin put on them. Poor acquisition, leads to poor cost control and smoke and mirrors in the P&L. Underlying profit for the period is next to nothing.

I just wish I'd kept to my convictions this morning. I saw the results, thought they looked bad but wanted to due my full due diligence before I made a call on my investment. Now the price is 7% lower than what I might have been able to sell for.

Will consider a sell tomorrow as I don't like the path JW is taking us, and the flat out spin we are being told. This company was a great little company, that has taken a massive step back since JW joined the company.