ERG 0.00% 6.1¢ eneco refresh ltd

ERG annual result

  1. 2,070 Posts.
    Some informed analysis posted on Ozestock:

    "Hi Everyone,

    IMO ERG will report a loss of $179.2 Million approximately this year. Please post if you have more info or you can correct some of my workings. I do not claim that all info is accurate so please do your own research.

    Reasoning outlined as follows:

    ERG has had reports published saying that they will produce a loss this year. The reports have suggested from $206 Million loss (UBS Warburg) to a $9 Million loss (Assirt Equities).

    ERG reported in the first six months that they made a $199 Million loss. This was on revenues of $136.4 Million. In six months to the Dec 2000, ERG produced revenue of $184.2 Million. For 2002, the revenue reported is $47.8 Million less than the previous first half revenues. ERG has stated that this is because of the sale of the Telecommunications business to Downer EDI. I believe that revenues for ERG in the 2001-2002 financial year will be around $375.8 Million based on the following:

    Wild guess on revenues:
    ERG revenue for the first 6 Months $136.4 Million
    ERG revenue for the 12 Months to 30 June 2002 $272.8 Million

    Items guesstimated:
    Protonworld revenues $35 Million*

    *Based on agreed business from VISA, Amex and other previous owners of $30 Million per annum over 7 years and an assumption that Protonworld will earn $20 Million in revenue this year (based on previous year revenue, from ERG prospectus October 2001). I think that ERG has fully owned Protonworld for 6 months, so I have divided by 2 (presuming six months) because I am not sure when the transaction settled. If the sale was settled in April then this figure may only be $17.5 Million.

    One off items:
    Melbourne Transit System Settlement $35 Million
    Singapore Project Completion $20 Million
    Downer EDI Share sale $13 Million

    Other items, not included:
    ERG is to report Smart Card revenues for the full year for the first time on September 2, 2002.

    On balance ERG’s managers’ will grow revenue by 40.5% this year. Over the last ten years ERG has grown their revenues on average by 34.7% (research by Aspect Financial). Not bad going from a company that is currently out of favour with Mr Market.


    Expenses:

    The half yearly expenses for 2001-02 were $213 Million. This excludes the one off write-downs (expenses) of $155.38 Million. The one off write-downs will save about $15 Million per annum in depreciation charges. I believe that annual expenses for 2001-2002 will be around $399.5 Million after savings.

    Wild guess on expenses:

    ERG expenses for the first 6 Months $213 Million
    ERG expenses for the 12 Months $426 Million

    Items Reduced from expenses guesstimated:

    R&D savings $6 Million*

    * Source: Half-year power point presentation from ERG to Australian Shareholders Association.

    Savings from operating activities $13 Million*

    *Annual cost savings achieved were stated as $26 Million. Achieved around January/February of 2002. This figure has been divided by 2 for simplicity. It may be $1 or $2 Million out.

    Savings in depreciation from write-downs $7.5 Million

    Potential further loss (not putting in final calculation) $169.4 Million*

    *This is the item for project management and software development that is capitalised on ERG’s balance sheet. Refer to Note 15 in the 2001 financial report – under non-current assets.


    My guesstimate for the 2002 Financial Report would be:

    Revenues $375.68 Million

    Expenses $399.5 Million

    Write-Downs $155.38 Million

    Profit/(Loss) ($179.2 Million)

    ERG will claim that they made an actual loss of $23.82 Million before write-downs and that there future is looking very bright.

    How bright their future is will depend on whether they win the right to operate Singapore’s transit system and others around the world. This is where large profit margins will be made by ERG and will transform this company for the better. I have my fingers crossed and this is why I invest in ERG. San Francisco and Rome transit contracts to operate the cities ticketing system’s will be the beginning of massive profits in ERG’s future."
 
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