RE: RE: RE: RE: RE: Risk vs Reward??!?? First off, how do you pay interest payments on $90mm in debts if you are cash flow negative?? I dont know where you get your numbers but FTP lost money the last 2 quarters, so EBITDA or not, it doesn't really matter. They raise $40mm in debt to payoff other debt..???
You say they will lower cost more to be competitive? How about buying a mill in the country you are going to sell your products in and ship the raw material there? You are selling cellulose to a county that has its own trees and own mills AND the cheapest labour in the world. You will NEVER get your costs that low.
Ohh that leverage? you mean a D/E ratio of .75? High for this industry....
I would love to know how you came to those numbers..??? Does FTP own the Dresen Mill??
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I prefer not to do all my analysis through the rear view mirror. No one is going to buy what FTP did in the last two quarters. They want to know what it will do in the next two quarters and beyond. With the Thurso plant in operation, it in itself will be generating over $2 million PER WEEK, in free cash flow.
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It is a lot cheaper to export the final product then to export all the freaken trees. That is why Canada and Brazil are some of the lowest cost producers. The Chinese plants would rank up in the higher quartile of costs, if they ever get built, due to their severe lack of trees. Canada is the 2nd largest country in the world and if you look around, it is about 70% covered in trees.
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I couldn't care less about debt to equity. When you buy a billion dollar company for a million dollars, your equity values on the books are bound to be a little understated. Look at interest coverage, going forward. It paints a much better picture and it should dispell all your concerns about debt.
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Yes. FTP owns the Dresden mill.