Adjusting for the impact of the strike, EBITDA would have been $40.5 million in Q2 and $74.5 million for the first half of this fiscal year.
to put that in perspective, the previous high for any fiscal quarter in the company's history was a little over $33 million. So the question is all about sustainability going forward. Here is the commentary regarding this particular point. Essentially, the company feels confident that sugar margins are likely to remain buoyant, due to having already locked up pricing for the remainder of the year.
Using an EBITDA run rate of $150 million and assuming RSI trades at its historic 9x EBITDA that equates to $1.35 billion. Less net debt of $350 million , the equity value would be $1 billion, or $7.81 per share.
Here are the conference call responses around sustainability of margin:
Question: On the gross margin, that's quite an impressive jump. I don't think I've covered you guys for 25 years or so, and I've never seen a number like that. So, I know you said it reflects the good markets in Canada, but are you comfortable with it -- with the analysts and investors, assuming that this is somewhat sustainable at these levels for the back half of the year?
Answer: Well, I think the short of the answer is that there's a bit of cyclical here. So we hadn't mixed, as I mentioned earlier, Mike, that, you know, reduction, a bit of export that favored us. There's no doubt that the margin is higher. I'm not. I wouldn't say that this will be at the same level for the rest of the year, but it should not be that far off from what we've achieved in the second quarter, considering the recent agreement that we signed and considering what the market is, what the market is driving right now with demand. And once again, the sugar economic favor in Canada by 30% to 40%.
Question: Okay. All right. So you're relatively comfortable with that Q2 run rate just adjusted for a little bit, a little lower per mix?
Answer: Yeah….as you can appreciate, we're sitting here now. Most of the -- most of our contracts are booked for the year. Most of our pricing would be done for this year, and we'd be working on the next.