Just to be clear, AEJ didn't make a $93 million profit after adjusting for the asset writedowns - you MUST also exclude the $345 million they gained from the Babcock & Brown loan settlement. Using your methodology:
Reported loss $577 million
DEDUCT B&B settlement of $345 million = loss $922 million
ADD Goodwill write off of $670 million = loss $252 million
As much as I would love to say otherwise, Alinta is not generating ongoing annual free cashflow of the amount you are suggesting - to achieve these numbers we need to have a series of B&B style debt restructure one offs each year as the day to day operations are as they are portrayed in the accounts - EBITDA of about $320 million and a $230+ million interest bill that gets first bite of this before any necessary capex.
Also, it should be noted that there are two levels of maintenance in a generation business. The first level is expensed annually and that is standard maintenance expenditure such as minor turbine overhauls (eg taken offline for a few days and then recommissioned).
Major turbine overhauls (ie a one to two month rebuild of turbines after a certain number of operating hours - say every 10 years or so) is a capital item and AEJ either needs to have the cash on hand or available under debt facilities. Hence why this item needs to be provided for in the analysis of free cashflow available for equity and / or debt.
AEJ Price at posting:
5.3¢ Sentiment: Hold Disclosure: Held
