the profit on water component for the last the 6 months was in trading of water rights ie as on the share market. prices per ml. vary enormously - from less than 400 ml. in 2001 to over 1,400 a ml. in 2009, when the government was actively buying up to 8% of the available water, and currently at the last sale for $910 ml. current water rights value would then be @ $910 a ml.x 38,000ml. = $34.5m. / 158 shs. = 21.8c/s.
the company is not just a holder of water rights and seller of water but also a trader. it wants to buy water rights now at opertunistic prices when water is plentiful and sell at at substantial profits when the next dry comes along and water is scarce.
seems to me that in priciple this is a feasible business plan. however to make the optimum profts from this means guessing the timing and extent of wet and dry periods.
running a business based on the variables of rain in these mostly parched inland areas is a substantial risk.
i think now that the profits as forcast may well be there when full results are announced.
i am still thinking about this stock.
TAN Price at posting:
39.6¢ Sentiment: None Disclosure: Not Held
