arw hike boost inherent value, page-4

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every 5 cents rise in ARW is worth 1 cents to the AMU share price.

I am a bit surprised by the move on ARW. However it have been slowly moving up since around the 130 mark.

I recently went back and looked at the prospectus so see how much the recent oil price changes would benefit AMU. From the prospectus AMU is projected to earn around 14 cents a litre NPAT on the first 2 refineries. The prospectus was based on a Terminal Gate price for Diesal of 84 cents. I beleive this price is now over $1 however as they were planning to export a significant quantity cannot be sure how much of this 16 cents + increase will find it's way to the bottom line. I would think 10 cents a litre should be conservative. This would mean profits from the first 2 plants would now be around 20M versus 12M in the prospectus. This would put them on a 2006/7 PE of around 8.6 will plans to build more plants.

All the above assumes that the forecast in the original prospectus was accurate which is always a big assumption.

Maybe this is the reason for the increase in ARW. Also could be that they are getting close to production at the first plant and it could be going better than plan

I am holding AMU which slao gives me a indirect interest in ARW