$113
Thoughts?
Sentiment: Strong Buy
Oh my bad sorry .20 cents per share is wrong for net !! thanks for pointing that out, .20 is way wrong!! if we want net we still have to account for depreciation and "SG&A" that's Selling General and Administrative-- SG&A, then we need Interest, I'm just making this simple.
So lets say our little WGP was able to bring in revenue of $30 million and we subtract the cost of operations at $4 million, then we subtract depreciation we will use the straight line method, let's say the total cost of the project is near $210 million, the plants going to last 30, years so we need to subtract $7 million for depreciation, Now we are at $19 million gross, not bad, now lets subtract the loan interest we took out at $5.8 million, with amortization it will go down year after year we are now at 13.2 million gross.
If SG&A was to stay the same no change, keep in mind not the correct way to do this, what I'm doing is over simplifying, it's very rough numbers here, $13.2million is what the income before tax expense would be, considering they have a tax benefit and can claim certain expenses as tax right offs, I think they will be able to keep all of that ,somewhere in the 10K it might explain the tax benefit a little more, so lets say no taxes, net income would be $13.2 million. With taxes it would be -37.7% less
How you come up with EPS, Is earnings per share is equal to net income divided by total shares outstanding, so currently there are about 104,000,000 million shares. So if we do the math we get close to a EPS of .13 so for every share you have you made net income of .13 cents. cash flow would add back in depreciation so that might be where I got .20 cents, depreciation is a non cash expense.
Chris that's good to hear! :D
I think the loan and principal payment on the $120 Million at the 4.5% would be near $7.22 Million. I think we can agree that revenue would possibly be near $30 million I'm trying to come up with what might be a good estimate of what the expenses at the plant could be, I'm thinking somewhere in the 4 million range? So if we account for the payoff of the 21 Million at 6.75% then we are looking at about .20 cents per share net income if SG&A stay the same.
Wrenn
Sentiment: Strong Buy
Hi ballman I did some number crunching and according to the last call they said they are getting $21 Million in grant funds from the ram project something about being able to count about $70 Million worth of cost from RAM, and then they will need another $160 million to finish the project"Pre Grant".
So let's say for fun they score a government loan at 2.6% "BIG IF--- " but at the same time politics will decide how "BIG that if is " I.E-- Federal reserve interest rates rising or doing nothing""what party is elected" ---"who supports what incentives"--
Now lets say they they pay down the 6.75% loan by using the $21 million received for RAM's post work on WGP project. That's 1.19 million in savings in interest and .875 in principle a year. that's about 2.065 million a year in savings, now they said they estimated 160 million to finish the project, 30% of that 160 million cost will become grants worth about $48 Million, that they then can use directly to pay down the loan related to the WGP project,
Thus leaving a remaining balance of $112 Million to be financed, at a 2.6% fixed rate over the next 30 years that's about $2.912 Million a year in interest, and the first year principal payment will be about $2.4685 Million for a total cost of $5.3805Million, in order to just get the project going, but they will have the an additional savings of $2.065 million from paying down the previous loan. Thus placing the total financing cost every year near $3.31million for WGP.
Now the next step, let's say they get the plant up and running and are producing 30 MW net, I believe it's NET?? let's say they keep the plant operating at the 90% mark" a conservative estimate"--correct me if im wrong----
if we take the planed plant down time into consideration let's assume it will now be 88% of that 30MW that we will be expecting for our revenue generation, assuming this, lets say they produce about 231,264 MW hours a year 633.6 MW hours a day. With no PPA, they could/would be forced to sell directly to the wholesale market, "I used the NP15 northern california wholesale market,"--see IEA government site-- for where the weighted average came from for real numbers" using just this years numbers, so far, the average is about $37 a MW hour , and going all the way back to 09 using a weighted average average, we are looking near $38 "with a very low variance" that's $38 a MW hour that is a extremely conservative estimate here, with no PPA WGP could be bring in about $8.556 Million a year.
Now if you're more optimistic let's say we get a deal at $120 a MW hour with a 2% increase a year, currently California Utilities will bill california customers at .24 Cents a kilowatt hour basically $240 a MW hour thats a large spread from producer to consumer of over a $120 I may be wrong but it seems likely that a large scale corporation would gladly pay .12 Cents a Kilowatt hour vs .24, the most likely targeted consumer would be a large scale database warehouse with a bunch of servers, who needs reliable power at a consistent rate. Hmmm so that would mean with our conservative estimate of power generation at 88% we would produce revenue near $27.751 Million so almost a 100% increase from our current revenue, now lets say they get the plant to operate at the 99% they have proven that they could do this at the other plants, and lets say a year or two of fine tuning ,ok 2 years go by ,we are now charging $124.84 because of that 2% price escalation and producing 99% of 30 MW hours with very little down time now revenue is $32.5 Million.
So these are two examples the real question is what is the one that is most likely to occur and what is the PPA going to be for?
Sentiment: Strong Buy