OTCPK:PILBF - Post by User
Comment by
aggmanon Oct 23, 2014 1:50pm
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Post# 23055168
RE:RE:RE:to frozen in Ontario
RE:RE:RE:to frozen in OntarioA couple of points - and management has made the first one:
1. LA pricing is different to SFO pricing. What they sell in SFO for $13/ton will likely sell for $18/ton in LA. Keep in mind also that the margin is richer in LA because they will sell direct (no marketing partner) and retain all of the margin (granted they have a concrete engineer - Richard Williams - dedicated in LA - so his overhead is in SG&A. Sales into LA are going to provide significant juice - higher prices, much fatter margins.
2. I don't have SFO pricing data back to 2004-2005 - but I do on the vol side and in SFO we are 40% (in 2014) below the 05-07 vol peak in NoCal. As that volume comes back - pricing (also based on managements expertise) will improve substantially. I'd say $25/ton in SFO is not doable. But if they get 9% or higher ASP increase YoY for 4 years, whilst improving SFO vols to 5M - you have a very powerful outcome in SFO.
Then add LA. Compound powerful.