hmmmm, East Kundana should go - at minimum - for the full fin yr...

hmmmm, East Kundana should go - at minimum - for the full fin yr 2020. Rebecca told me 'March Q', but this old announcement clearly says it started late June 2017. So should go to miminum late June 2020.





So, I think we can await a guidance upgrade. The first half BOO ebitda was so high, that simply doubling it blows existing group guidance out of the water. Guidance upgrade likely will come the first week in March when GCY signs on for more purchase agreements for MarchToJune.

Current ebitda ( consolidated group guidance) is 26-27 mill. For half one group ebitda was 14.8 already, with more MW spinning for half two. And as I said, I think 3 months GCY was excluded from current guidance. So perhaps we can expect 14.8 ebitda + 14.8 (*1.2), 2nd half more BOO online by 20%. (I prior guessed at a full year 45 / 55 split, and 55% is 20% more than 45%... isnt it .

So that is 14.8 + 17.8 = 32.6 plus the GCY ebitda for three months, so let us round to $33 mill.

It seems too good to be true that group ebitda guidance of $26-27 mill will end up at $33 mill? Where have I screwed up? And recall the MOM/EPC was so bad this first half, that there can be even more upside there. And this $33 mill number even allows Peter to find another $571k to write off - to mimic half one. So, if we have not more write offs, and with only good news, we could be at $34 mill ebitda for the year. But I dont believe that, even though my calculator says that.

Just to double check this need for new guidance upgrade, just consider the BOO segments only (see two pics below). The full year BOO revenue guidance was 53 mill midpoint. And in this half yearly, we already have in $25.7 mill. So we have done almost half the revenue, and we know 2nd half will be more.

Also, here below you can see how I got $5 mill per half year revenue on MOM/EPC. (See red arrow from 52-54 mill BOO revenue to 62-64 total revenue, therefore MOM/EPC is 10 mill revenue per year. But that seems to just not happen anymore.)

So Zenith have become almost full BOO a couple years ahead of schedule. Zen did say, at one stage, 'we are a couple years ahead of schedule'. But they gave no detail what their schedule was! Now I know. I mean their goal was BOO more and more as a percentage of revenue and ebitda. With what we saw in half one, and knowing Barrow will very soon be 100% BOO and not a MOM/BOO mix, Zenith will be more BOO as percentage of the total. In fact, over 90% of revenue/ebitda will be BOO related, with the higher margins and long term contracts. Wow!

Now isolating the BOO ebitda shows the biggest positive Ebitda for BOO was guidanced for the year at $35.5 mill (midpoint ex expenses). Yet first half we see $18.5 mill. So another proof that doubling half one alone will overshoot current guidance!





...and the 'other' here below is expenses re the BOO and corporate, and they fell $1 mill - from $5 mill to $4 mill. How did that happen???? I am not sure why their income tax expense is lower than the normal 30% this half year.

Also, consider their 'projected/guidanced margins for 2020 full year', ie 26.5 mill / 63 mill for the year at 42%. Compare it to the actual 50.5% of this half year! I had their margins projected on my model at 42% this year and growing, but not hitting 50% until fin year 2023. So there you go, they are indeed a couple years ahead of schedule).

Another interesting thing to look at below is the BOO growth - compare half 1 2019 with this half year. BOO revenue grew $8.4 mill and ebitda grew $6.6 mill. 6.6 / 8.4 gives a margin of 78% on the growth. That proves another point that Zenith is becoming much more efficient in producing BOO. So you get from 37.5% actual margin in full year 2019 to 50.5% in half one of 2020, by having such good margin on the INCREASE of BOO revenue.

There was a lot of hotcopper chat, in the past, re the poor Zenith margins compared to Pacific Energy. I guess we are not at the old, solid, PEA money making model, just yet. But we seem to be well on our way. I wonder what the group ebitda will look like if another $8.4 mill revenue is added on, with a 78% margin on the add ons.