Minor adjustment to the trim
If you are going to add the spares into the depreciation then need to add spares capex onto the $2.1B spend. Want to split the difference on the net value and call it $220M?
We both need to add the $420M progress payments already made back because they are not the progress payments included in the future capex figures.
Stronger NZD good for buying planes and fuel, let us hope it lasts.
Do not know the precise details for airframe hours and cycles for AIR 767s but ballpark for that age appears to be about US$10M buying price.
Best Wishes
Paper Tiger
A slightly different viewpoint on the trim angle / tweaking the rudder angle slightly
Quote:
Originally Posted by
Paper Tiger
If you are going to add the spares into the depreciation then need to add spares capex onto the $2.1B spend. Want to split the difference on the net value and call it $220M?
We both need to add the $420M progress payments already made back because they are not the progress payments included in the future capex figures.
Stronger NZD good for buying planes and fuel, let us hope it lasts.
Do not know the precise details for airframe hours and cycles for AIR 767s but ballpark for that age appears to be about US$10M buying price.
Best Wishes
Paper Tiger
Seeing as the company hasn't flagged any obvious additional capex apart from the planes maybe a holistic approach towards deducting total company depreciation isn't entirely inappropriate ?
Regarding the $420 deposit already made, if its anything like building a boat they want progress payments as the build progresses so I would speculate a large part of that deposit is progress payments on the 3 dreamliners they're getting imminently.
I started looking closely at capex and gearing post this dividend payment to examine the companies ability to be able to continue to pay 20 cents in dividends across the cycle. I am comfortable from a balance sheet perspective in terms of gearing and capex they can do this. Profitability is a separate matter and while its notoriously variable in the airline industry based on the mid point of this years forecast ($500m) in a year in which the competition is very intense I see EPS of 32 cps. ($500 x .72 / 1123m shares)
Thanks for your thoughts on average 767 sale price.
I'd like to think we can find common ground that net capex for the next three years of the fleet replacement cycle is inconsequential in the context of a company with turnover exceeding $5 billion per annum and after FY19 in the words of the CFO Rob McDonald, "we're looking at years of tremendous free cash flow"
Winner mate you raise a good point the other day about the $150m bonds @ 6.9% being due for repayment in November 2016. I'd expect they'd offer up a new term of 6-7 years at around 4-4.5% saving ~ $4m per annum in interest.
Another point, we know the little 19 seat planes have ceased operations and C.L. said they were costing the company ~ $1m a month.
I like the way that management is continually looking for cost savings and efficiencies. We haven't really talked much about how efficient the airline will be from FY19 onwards with one of the most modern fuel efficient fleets in the world at only 6.2 years average age. To coin one of Percy's favourite sayings, it appears we're well positioned :)