RE:Revenue vs marginThere is simply no transportation cost being passed on to the customer. For example: Ton is $40, transportation is $20.. SNS charges $60 and incurrs $20 costs for transportation. There is no margin on the transportation, it is simply flow thru revenue/cost. SNS will still make the exact same profit margin, being $40 less their cost per ton. So revenue will be lower, but cost of goods sold will be equally lower, thereby having no impact on gross profit. You would think margins would improve thru economies of scale and a larger ton base sold to allocate fixed costs over. Zig has mentioned this a number of times now. Hence why SNS was able to generate $3M+ in a QUARTER when running just beyond capacity.
Dexo89 wrote: Zig was careful to state that increased tons sold did not correlate to revenue due to a large percentage of q1 sales occurring at the mine gate, effectively transferring transportation costs to the customer. On this point the PR differentiates between revenue, (not correlating to 13% increase in tons sold) and margin "from dollars perspective". I can't quite understand what they're actually saying, even though I think they are trying to communicate the situation. Are we to expect the margins to be more improved than revenue due to mine gate pricing in Q1? Anyone want to weigh in? Looking forward to the release of financials at the end of the month.