On the move in expectation of results, page-21

Thanks for your post. You indeed make some very good points and took a close look at the annual report. Some comments to consider though:

Underlying earnings indeed fell last half year but I think the presentation did a pretty good job highlighting the negative contribution from Delineation drilling unit and it's impact on EBITDA.

JSW's profitability went down this half year, but I think management could be quite correct in pointing out that high mobilization costs lowered profitability.
On the other hand, year-over-year the profit on JSW increased dramatically against a loss last year of 2,8 Million on 30 Million in revenues (see page 22 of the 4E). Against these numbers, a 2 million profit is a great improvement.

The lower cash-flow I assumed was related to the Express Hydraulics expansion. They need to buy all these spare parts first. So when this business finds it's right size, it shouldn't be a cash-flow drain anymore.
On the other hand, I'm not worrying about the higher accounts receivable, especially when you look at the creditworthiness of most counter-parties (mostly blue chip mining houses and government bodies).

But you indeed make valid points. The most worrying one is the missed guidance. I can't see what can explain this large a miss. Another concern is the lack of new contracts in the East-coast business, which has always been the cash cow. Hopefully they will be able to make some improvements here.
All that aside, I still believe in the value of this company. This company is cheap (PE of 4-5 anyone) at a point where all other drillers are making massive losses (besides Swick maybe). Even Action Drill and Blast (a NRW subsidiary) took quite a beating this year, and they cater to a lot of civil work too.

The balance sheet doesn't look pristine, but they managed to lower debt slightly last half year, which wasn't a good year for the industry, and they have the intention to lower it even more. I don't think they are obliged to do it, but that it is management's intention to do so.

Also add many one of items (a 1,5 million cost related to the JSW acquisition), the disappointing Reichdrill results (hopefully these drills will be delivered in FY15), the many contract losses in coal due to mine closures, the many start-up costs related to the Express Hydraulics expansion and JSW contract mobilization, the higher than average debt, etc... and I still think this company did very well.

The new presentation at least did give more clarity than previous ones.

But again, thanks for your thoughtful post.