re: News: NewSat Limited presents to the Aust...
Hi gomboc,
Yes, I saw plenty of other good in AB's speech but there was not a lot of 'new' information - ie as per usual he uttered the go-to phrase "beach-front property in the sky" and things like that.
But here's what I liked: - Newsat has had 16 quarters of growth, and they have not lost a customer for 3 years (except for mining or military projects that had concluded). - coface loan is at 1.76%, exim a couple % higher. The due dilligence that coface and exim put in before granting the loans, going over the Jab-1 contracts, and their deals with Lockheed-Martin and Arianespace. (AB said 8 months of due dilligence) - They are predicting $188 million EBIT per year for 15 years for Jab 1, if it is at 70% capacity rate. Other operators in the same region are at 90% (and I presume not all have Ku-Band). Expected Year 1 fill rate > 60%. - steerable beams to maximise capacity in high (and potentially unexpected) growth. - Jab 1 is in a high growth market, which has the high need for capacity - They are wanting to move existing customers at 30% margin to Jab 2 for 80% margin in 2013. Given their customer retention rates, I feel that they should be able to achieve this with most customers. - Jab 3 has 150 million in orders, and 4 "almost the same" (I presume most of this is 'in the pipeline', since I don't recall market announcements for anything close to that amount). - Risk mitigation: AB said that there was planned short durations between satellites, and that they are complimentary to those before it.
All of the above make me comfortable in Newsat. Plus knowing that the satellite is being built (, government agencies have provided 2/3's of the funding at a low interest rate and, according to reports, there is only a 1% chance of failure at launch, I am confident in the long term success of Newsat...I purchased some more yesterday. I realise that there's a small risk in that we don't know the details of how dilutionary the $200 million raising will be, but that's a bet that I am willing to take at these prices.
Here's the 1% chance of failure at launch link: http://afr.com/p/technology/loan_deals_jabiru_launch_critical_8yYCm7ZkNkw3HMhI2rVLzH
Personal disclaimer - I've only been a shareholder for just over a year, so I haven't been burnt like some of you have by AB so I can understand why some are wary of the promises.
NWT Price at posting:
50.5¢ Sentiment: Buy Disclosure: Held
