RE:CJ ExpectationsCoolson wrote
Everybody is in love with 6c dividend. But you have missed the big picture. They moved 50m debt reach to the next quater, and there is high probablility that they will not pay of the loan as they said by the end of the year. It is fishy to me. They question is are they playing to satisfy the major shareholder?. I do not like companies which do not follow the guidance thay set up...Also I do not see any share buybacks since a while...
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Yes there is now way with the increased second half capex, share buybacks and now increased dividend that they will be able to pay back all debt by the end of the year as they still owe $50 million nearing the end of the third quarter.
At the same time is it really that important whether they pay off all debt in the fourth quarter or the first half of next year? The main thing is they have knocked debt down from well over $200 million to under $50 million and headed towards zero.The higher second half capex will also benefit the company next year. I do agree though that they should not make promises they cant deliver on.
Currently CJ sits at $50 million in debt. Assuming $85 oil going forward they should have Free Cashflow after the normal $100 million yearly capex of aprox. $230 million. The 6 cent monthly dividend costs them aprox. $110 million per year so they should still bank aprox. $120 million per year after capex and the dividend.
With that amount of cashflow CJ even with the higher dividend and second half capex should be able to pay back all debt by the end of the first quarter. From then on its clear sailing with the 6 cent monthly dividend and $10 million in cash piling up in the bank every month.
Its looking really good.