I think 200m left by 25th of August.
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I think 200m left by 25th of August.
Still have $800m plus of fares paid in advance (or waiting for refunds) and over $400m for expected loyalty travel / points
Total Equity left as at 30 June 2020 $1,318m.
Annual Depreciation and amortization last year (excludes abnormal write down on 777-200's) $841m = $70m per month
Predicted cash burn at mid point of range going forward $$75m per month.
Total of cash burn and depreciation and amortization $145m per month.
1318 / 145 = 9.1 months before all equity will be expunged as at 30/06/2020 = 7.2 months from today's date.
NTA as at 30/06/2020 was $1.01. With estimated losses since of circa $290m I estimate the current NTA is about 75 cents.
My conclusion.
The company is almost certainly going to need to raise capital in the next 7 months otherwise it will be insolvent and in a negative equity situation.
I believe the prudent thing to do would to have been to raise equity now.
I think its politically inconvenient for the Govt to do so because some of its voter base would think the Govt is supporting capitalism.
Raising equity later runs the very real risk of trying to raise capital from an extremely weak desperate financial position and the risk of a repeat of the extremely deeply discounted capital raise after 9/11 at 25 cents is very real.
If anyone thinks this is an investable proposition at the current share price I very strongly recommend you take professional advice.
No it was approx $200M left at the end of June.
And since then, burnt through $85M of that in July & another $85M in August (well we're almost at the end of August).
So all gone in next fortnight at this rate.
Ongoing hoping to get cash burn down as low as $65M per month & might be a few years before travel returns to anything resembling normal.
Probably burned through more in August as a result of the Auckland lockdown.
Liquidity (if you can call it that because of the degree of prepaid airline tickets which are technically a liability) was $235m as at 30/6/20, (PowerPoint presentation).
The fact that they are talking about drawing down on the Govt loan "within days" suggests total cash burn for July-August is VERY close to $235m !
Indeed, can't be supporting capitalism! Any suggestion of that and the left will be typing even more anti-capitalist messages into Facebook, from their Apple device, prior to doing some comfort shopping at Amazon, often with money given to them after it was forcibly extracted from others, to make themselves feel better after even having to think about that dirty, evil capitalism.
Oh to be so pure.
I've never seen a company run out of cash, be drowning in debt, have a very poor outlook in the short to medium term and still be valued $1.6 billion (without fiddling the books that is) - yet AIR today, with its share price flat on the open, has proved it can be done!
A monopoly when times are poor and everyone loses money maybe, a highly intense competition when there is breakeven/a fraction of profit to be made - so not sure how 'almost a monopoly' is actually a good thing right now, but as for the brand... I personally don't think AIR NZ's brand is worth remotely close to $1.6b but at least it isn't a negative value I suppose
flying on fumes!!! that slow whine you can hear is the turbines slowing down as the fleet joins the birds flying south....
Air needs to raise capital and reject the government loan... extortion by the non believers.