I emailed the company asking this question. In the absence of further contracts, can the company expect to become cash flow positive in current market. No reply in a week, which is disappointing.
I must have misunderstood what sale on a 'cost plus' basis meant, as I figured it meant the company produced diesel, and they were given a fixed margin of profit. Meaning they were hedged against movements in market in either direction, they just receive a small profit. In light of the share price movement, I can only assume my interpretation was wrong.
Does anyone know what cash flows company can expect going into next year? Excepting those exchange rate adjustments, looking at monthly reports I cannot tell if they will go cash flow positive or not.
The SP was holding 3-4 cents in anticipation of the deal, which went through. There was also anticipation of further deals, and they seem unlikely at this time. I don't see the justification for slashing of value (exceeding drop in general market) after the deal was announced.
Diesel prices have remained resilient (30% higher than ULP) despite drop in oil. At the same time tallow input costs have dropped significantly, and may well drop further. I would have thought because of this the company outlook has improved since a few months ago. Anyone feel this is not the case (with reasons, of course).
TEK Price at posting:
0.5¢ Sentiment: None Disclosure: Held
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