The $500m EBIT being mentioned may be conservative if the figures ending December 31, 2015 are accurate. With the rising steel prices and tariffs in place Whyalla aside the steel business must be generating $200m, Molycop pushing $200m and IO costs should be under $40 a ton with the new shipping contracts coming into effect this month and improved efficiencies may see IO margins at $10 a ton.
The $300m annualised savings being promoted must see Whyalla in the black rather than the forecast $11m loss, if I was trying to get workers to go from $32 an hour to $29 an hour I would forecast a loss as well.
The rail infrastructure works brought forward, Government loans, wage reductions and freezes along with support from the likes of BHP, RIO, Lend Lease and Meriton for Whyalla structural products one has to ask why the delay and secrecy surrounding the financials of the Arrium business with nothing to be provided to employees or shareholders until 2018 ?
The fix was all about cutting costs and signing contracts in the best interest of Arrium not the suppliers, if that has been done as it should as part of the administration process and along with significant improving fundamentals and the previous Board no longer involved then it should return to trading asap with new leadership.
ASIC need to be asked for a please explain.
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