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fitnfam, I whole heartedly agree if ARI can't trade profitably...

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zubric

3,189 Posts.

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28/04/16

15:25

Post #: 17621981
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Originally posted by fitnfam ↑

When ARI comes out of V.A.

it won't be with a wimper,but with a shout of a strong newborn.

Gone will be the dragging umbilical cord of low steel prices that have brought the Whyalla "transfer steel pricing" "into the limelight and had hidden the poor economic operational running there for years.

Gone also will be I/O exports at a cash flow drain wiping $1bn off ARI's asset values.
Gone will be the $240m drain on cash at both sites,in the three months prior to Xmas.

Of the $4bn or so worth of debt,gone also will be the impending payroll cost of paying out holiday pay and other entitlements to staff that have been crystallised as a debt figure,such as pension fund deficits,that can change to assets quickly as a changing share market changes from one month to the next.

ARI's immediate cash flow crisis is all but over,with the placing of a hold on debts,while still banking the cash coming in.

If ARI can't trade profitably NOW with steel up 50% in value and the domestic market protected finally by tarrifs,while at the same time demand for its products are rising at beyond the rate of inflation,I'll eat my hat.

So a business in V.A making money,but not enough initially and business assets but not enough the way accountants have to value them every year on multiples of income,as of V.A date.

The moment IO went up,so did the IO business asset value rise.
The moment Whyalla steel breaks even or makes money its business value will rise above and beyond MINUS taking the asset values back to where they need to be.

THAT IS THE ONLY RECAPITALISATION ARI NEEDS.

Just As long as it is making sufficient profit to meet its debts as they fall due.
The rise in Australian steel prices recently would indicate at $150 a ton ARI's steel income can be expected to rise by $300m at least this year ahead.Half as scrap produced steel and more than half raw steel at fixed IO cost.
It's market share will be up thanks to duties-so say another 10% growth adding 100kt demand worth $100m to the bottom line.

There is a turnaround with a vengance coming.
$50m PLUS here from IO at current prices after SI wind down costs
$100m there from steel market growth and tarrif protections.
$88m existing from ARC steel.
$200m ex Moly-Cop

$430m on today's figures ?????????
plus $300m income rise from the rise in raw steel prices worth how much to the bottom line???????

DYOR + DYODD Everone will want a piece of the action if they can at OUR EXPENSE and shareholders must be prepared to vote down any DOCA that involves them losing,WHEN THE TIME COMES.
Think of the Kudo's and extra business KM will get if shareholders come out of this saga unscathed.

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fitnfam,
I whole heartedly agree if ARI can't trade profitably in the now changed economic environment i will help you eat your hat!! .Please can i have lots of tomato sauce lol!

ARI Price at posting: 2.2¢ Sentiment: Buy Disclosure: Held
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fitnfam, I whole heartedly agree if ARI can't trade profitably...

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