Unlike many of the analysts, even the fellow from Pac Crest, you LISTENED to the call. I ain't gonna try and put lipstick on this, but they repeatedly said that CapEx to get Moema running is minimal.
Moema is NOT the driver of the reorganization.
It is commodity prices for baseload and then the consequent scale back to manage cogs. They are overcapacity at current prices.
While they did mention their pipeline, the really huge issue is getting timely industry adoption and landing contracts that will maximize capacity efficiency. The lead times are worrying and sales has got to make it happen. (Don't get too excited about their whopping 8 SKUs for algavia). Out til Nov 2015. Best to all - even the basement dwelling maniacs - I may join you, but with better beer.
I don't think it's intrinsicly downstream processing. If I understand correctly (and I could be wildly wrong) the main issue that effects both Clinton expansion and Moema nameplate is baseload of commodity oils.
It's a losing proposition at this low-capacity point of their existence to force the issue, and better to reduce nameplate and volume expansion until they have the new mix of products dialed in, so to speak. jmho.
In listening to the call, Moema downstream ops are really a side note.
As you said, the scale and tech are sound, arguabley so sound that they are realigning their entire product mix to changing market forces. So while I understand the AH cliff dive, it is ironic that it's this ability to completely realign that is the value proposition of szym.
They are doing exacly what few others in this space can. Unfortunately, the timing, right at their inflection from development to operations, utterly blows.
I WAS grousing about the hit on my 15 Calls but now I'll happily take that hit and buy myself a coulda-been-much-worse/count-my-blessings beer on the way home. Glad I stayed disciplined.
didn't lose a fortune, but frikin' unlikely I'm gonna wait it out with all of my current allocation. Agree with trader - prietty much dead money for the next year. Gonna take my beating and add to my exas position.
yes naa.spam that was the sound of exploding heads.
He admits the project that is closest to an investment decision is in Europe and also reveals that "there is a very reasonable chance we'll announce a new project in 2015".
Credit to mschuver for finding and KQ for posting. I'm just trying' to help out.
raising money to expand a proven business model is a wonderful problem. I'm just not up to speed on fianancing concerns and am thinking they likely can't wait until mid-late 2015 when both plants are at nameplate before starting another build. Though, if both plants are kicking it out then they recieve a premium price on any offering - but it seems a bit too static of a strategy. We'll know the story soon enough.
Given construction time and ramp time it’s roughly two years and some months to nameplate. Given the current cash position and burn rate it seems a move must be made soon even if such measures as a 50/50 JV and/or brownfield are used.
good work on the accounting. That stuff gets baroque pretty fast so I just try to stick to the big picture, for better or worse.
YEP, he's just obtuse, which is why no one really wants to post/argue his negligence. All you'll get is justification with no reflection. Like talking to a chicken.
has so little regard for the author and company that no one will even post a comment (outside of those blocked). A beautifully emblematic piece for the author and publisher. The longer it stays up the better.
Oh well, no great loss. I cancelled my subscription a while ago and really have no desire to engage him. In looking over his table it just seems off. He's saying that with 314mill in total sales they can at best realize 0.3% profit ((1mill/314mill)x100))??
Yeah, I THINK you may have something. There needs clarification on Gross Margin calculation. Post it in the comments and see. The easiest is 122k MT from Clinton+Moema +Peoria at 2000/mt = 244mill. Now, subt out annual adjusted opex. All this with the caveat that I know doink about corporate accounting.