Yesterday I posted a comment under the Waggaman recommencement...

Yesterday I posted a comment under the Waggaman recommencement heading about what appears to be a huge understatement of the loss sustained from the downtime that has not been reported accurately by IPL management. I'd like to give a little more detail and invite comment as to whether others share my logic.

The IPL announcement of 18th Feb described that a major shutdown occurred the day before and was expected to take between six to eight weeks to repair, with an estimated "impact to earnings" of A$125 million after tax if the plant resumed in eight weeks. The announcement noted the loss calculation was made on the critical assumption of the current ammonia index price of US$1135 per metric ton.

On the 19th April, eight weeks later, IPL advised shareholders that the plant had resumed at rated capacity and that the estimated cost of the downtime was now only A$124 million after tax. But NO mention was made about the assumed selling price for the lost production. Why not? Prices have risen by 50% in the last two months, largely as a result of curtailed supplies from Russia and the cessation of production from many European producers who faced extraordinarily high gas prices.

If IPL had used the current ammonia price index, its estimate of loss would have been perhaps 40% higher, after making some allowance for the slight increase in US gas prices. Even taking an average price increase over the eight weeks would have given an extra 20% higher loss, or a likely minimum increase of $25 million after tax more than advised.

Why didn't IPL advise which price they had used for their calculation of loss? And if they had not used current prices, why not? And if they didn't use current pricing, were they not misleading shareholders?