Is real depreciation expense more than reported?, page-2

First 2 Last

Share
Profile

Follow
goodie

1,376 Posts.

322

25/02/24

15:09

Post #: 72583881
Share

Originally posted by vagabond84: ↑

I was reading Warren Buffett's latest annual report and there was a part where he talked about his railway company, BNSF. He gives a detailed explanation of why BNSF didn't meet his profit expectations:

That got me thinking, is a similar factor at play here with McMahon? MAH similarly has large amounts of expensive equipment that must be routinely replaced. If, say for example, a Caterpillar truck with a useful life of 10 years that cost $10m 10 years ago, is depreciated at $1m a year, and now needs to be replaced in 2024, at a cost of $15m, then surely that depreciation expense didn't, after all, accurately measure the true expense incurred by its owners?

I've always been perplexed at how MAH pays so little dividends relative to its reported NPAT. The net profit that's reinvested into the business never seem to generate good returns. The logic for paying out more of its NPAT as dividends instead of reinvesting back into the business seemed like a no brainer. Have I been wrong now, and that reinvestment of majority of NPAT back into the business is in fact non-discretionary and sustaining capex?

(note: I ask this now more out of curiosity as I bought this earlier at 12.5c and sold into the subsequent rise. But I have always wondered why management didn't pay higher dividends.)

Expand

I can't answer your question. But I know that Steve Johnson from forager funds (who must be coming up close to 10 years of owning mah) sat down with the ceo a year or two ago and told him that despite doing everything right the share price was still in the doldrums. He suggested they raise the dividend. It seems like it fell on deaf ears.

MAH Price at posting: 18.5¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

SFX

Sheffield Resources achieves milestone production, shipments at Thunderbird, WA

ASX200 dives as inflation clocks in at 4% – higher than 3.8% consensus

SS1

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

NXM

Drilling at Bethanga shows signs of Cu-Au porphyry system for Nexus

NIM

Nimy extends sulphide targets at Mons with new anomalies identified

There are more pages in this discussion • 2 more messages in this thread...

First 2 Last

Add MAH (ASX) to my watchlist

(20min delay)
Last 28.5¢		Change -0.005(1.72%)		Mkt cap ! $624.9M

Open	High	Low	Value	Volume
28.5¢	29.0¢	28.0¢	$179.9K	630.7K

Buyers (Bids)

No.	Vol.	Price($)
15	304695	28.0¢

Sellers (Offers)

Price($)	Vol.	No.
28.5¢	115406	6

View Market Depth

No.	Vol.	Price($)
15	304695	0.280
11	177379	0.275
16	181541	0.270
6	101750	0.265
4	93990	0.260

Price($)	Vol.	No.
0.285	115406	6
0.290	1326224	13
0.295	187673	10
0.300	988811	27
0.305	355467	8

Last trade - 14.05pm 27/06/2024 (20 minute delay)

MAH (ASX) Chart

Is real depreciation expense more than reported?, page-2

Sheffield Resources achieves milestone production, shipments at Thunderbird, WA

ASX200 dives as inflation clocks in at 4% – higher than 3.8% consensus

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Drilling at Bethanga shows signs of Cu-Au porphyry system for Nexus

Nimy extends sulphide targets at Mons with new anomalies identified

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Is real depreciation expense more than reported?, page-2

Top Stories

Sheffield Resources achieves milestone production, shipments at Thunderbird, WA

ASX200 dives as inflation clocks in at 4% – higher than 3.8% consensus

Sun Silver gets that drill to thrill feeling from high grade hits at Maverick Spring

Drilling at Bethanga shows signs of Cu-Au porphyry system for Nexus

Nimy extends sulphide targets at Mons with new anomalies identified

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News