paper mills announcement , page-3

Hi Steve50,
As is common on HC i have a different take on the numbers for MSC.
Sales above the breakeven tonnage of 30,000pa will not add straight onto the bottom line as there will be costs associated with producing additional tonnes.

My feeling is that fixed costs run at around $4m-$7m per year leaving the cost of producing the 30,000t at $2m - $5m.

Until we can see actual numbers it is difficult to forecast profit as operating costs have changed significantly since the breakeven figure of 30,000tpa was produced.

If they actually sign the full sales contracts, the Dec 2006 half yearly report should provide some insight on profit/margins.