The company has been too busy in survival mode the past half. Too much charter v. trading. I reckon it should have made at least $5-10m more (I need to get my head around the $7m FX "loss" - not sure if its permanent?). I am very disappointed that some of the Aussie-Asia leg is on charter. I now understand what the company meant by "strategic refocus" when Troncone departed - may as well sell Drover if it's only chartered otherwise.
But that's all easy to say from the comfort of my desk.
The company has materially reduced the risks of solvency and potential dilution to equity. Debt was reduced again and ICR is now comfortably above >1x again. It has not drawn any of its $30m working capital facility (while it negotiates sensible terms with CBA). It ensured that it wasn't in breach of any CB covenants at 30 June (which keeps these investors in their box). And it is refusing more down payments on Kelpie while it negotiates for more time (hence the impairment of this contract). The secured ship debt is a comfortable 60% LTV.
Also worth noting that there is no litigation or threat of such against the company (friendly D?). Good to see the shoe on the other foot though - Wellard is suing Alpha Commodities for A$14m for reneging on its charter contract on Shearer (which left it sitting idle for a lot of 3Q). (I won't be holding my breath though).
Shame we don't have quarterly reporting in Australia - last quarter and this quarter are clearly better. However, it's credibility is shot and there's no other solution than good old fashioned profits and dividends to shareholders (and I yield to friendly D on that front).
WLD Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
