Ann: MV Ocean Outback Update, page-19

I'm sorry but I don't think you have a particularly strong grasp of reading financial statements. I don't mean to pick at you but when you throw around terms like "terrible," "frightening," and "call in the administrators" you deserve to be pulled up for misleading information.

The adjustments to EBIT for FY15 pro forma are entirely reasonable. They have stripped out one-off items (vessel fire, non-recurring items), added in higher overheads to reflect a listed company and adjusted for the new debt structure. This is all accurate and reasonable.

As for leverage, the company has debt of $117m and cash of $65m post-IPO, leaving net debt $52m which is <1.0x EBITDA. So a very conservative leverage profile. The comment about conversion of convertible notes is entirely pointless - that's what they are. They are notes that convert into equity on an IPO so irrelevant now. As for what the capital structure was before the IPO? Also irrelevant, hence the pro forma adjustments outlined above.

The debt is all related to financing agreements for the vessels. In other words the money has been used to purchase assets which are used in the business. The alternative would be to buy them outright, which is not efficient. The interest rate is low and it's in US$ because that is the currency in which Wellard generates revenue. 90% of FY15 revenue was in US$ as highlighted on page 96 of the prospectus. Having debt denominated in the same currency in which you generate revenue is called a natural hedge and is the best way to structure company debt.

The decline in US/A$ rate in recent months is positive for earnings, as you noted from the table on p113 of the prospectus. However, when you say the "debt value will increase" and this will shave 20% off NPAT, you are being incredibly misleading. The change in the debt value is just a mark-to-market impact which results from translating US$ to A$ at balance date. FX translation effects are stripped out of underlying NPAT for this very reason, since they move both ways.

Honestly, it's fine to do your own analysis, but when you come on here and have a massive spray and most, if not all of it, is wrong, then that's not cool really.