Impairement charge reversal worth more than the SP Revisiting my recent post.
Last year Akita reported their Q4 results on March 20th.So we should get them soon.
This is a guess, but i would't be surprised if Akita reverse a portion of the
2020 $80,000,000 impairement charge.
For those who remember,Akita recorded an asset impairment charge of $80,000,000 in 2020.
It was the covid year and activity level had drop to record low of 13% in Canada.
Akita impairment charge in 2020 equats to $2.02 / shares.
Take that $2.02 add $3.98 of book depreciated at 69% of cost(impairment included) and add $1.91 of tax asset not on the balance sheet = $7.91
Like i said previously,at tonight's close,Akita's 35 rigs are worth the value of building 2 new triple.
Q4 was a very low activity quarter.If they brake even in Q4, they will post EPS of 49 cents for 2023.
2024 activity levels is forcast to be better in 2024 than in 2023.
Ensign is moving, Precision is moving, it's only a matter of time before we see
the same for Akita.
Institution don't invest in small cap. like Akita, that could explain why it is not moving in sync. with the other 2
While activity is very low, day rates are strong.
If Akita make EPS of 40 to 60 cents in 2024, they should be close in reaching their LT debt level.
I think that they will continu in 2025 to bring the LT debt down.
Previously, i thought that the reversal would have a small impact on their
tax assets that shields them from paying income tax.
But reading carefuly,this asset is non-capital so any capital impairement reversal will
not have any impact on this tax advantage.
Again here is the detail of the tax advantage taken from page 19 of Akita 2022 annual
report A net deferred
tax asset has not been recognized for $76 million (2021 – $69 million). This amount is primarily related to non-capital losses carried
forward.
Total gross tax losses available to the Company are $434,694,000 with $398,191,000 in the US and $36,503,000 in Canada. The
first of these losses will begin to expire in 2031.
Staying long Akita since i believe i will double and maybe triple my investment over the next 2 years