Alterra Power MGMXD

asset writedowns

[materialsgirl]

Impairment of assets is a process that happens in just about every business.  Segments such as infrastructure and the extraction businesses (oil gold etc) are more prone to this type of hit.

Asset writedowns are not an evil occurance and they are not so damaging so long as the amounts are modest and not too frequent.

But if AXY (for example) has an average impairment of $15m per year over the next 5 years ($75m total) then clearly this is not a place to be. Calling such write-offs as non cash is a true lie.  Technically nobody goes to jail but the reality is that it is real cash that is destroyed

If  $15m cash is invested in 2015 and written off in 2016 it can be called non cash
If  $15m cash is invested in 2016 and written off in 2017 it can be called non cash
If  $15m cash is invested in 2017 and written off in 2018 it can be called non cash

But the description is solely intended to deceive individual investors who interpret such lingo as meaning "it is not so serious"

All write-offs are cash.  It is just that the cash was invested in prior years.

One of my favourite terms is EBBS which was coined at the turn of the century.
Earnings Before Bad Stuff.   Bad stuff includes rent payroll stock options etc.
EBBS can always then be the same as Revenue.  The latter two letters is what I call the management schemes to fool us.

We must watch out for "adjusted cash flow" or such terms which can mean CFBBS or cash flow before bad stuff.

The point is this.  If any occurance becomes habitual then by definition it is not "one time" or non cash in the true sense.

I am optimistic about the future but let's not accept mediocrity and requests for patience.  Patience was needed in 2010 to 2015.  In 2016 and beyond what is needed is management performance and impatient investors to drive them.

Mat