RE: covid/debt/revenus/marginsNo, they aren't.
Debt will be significantly higher than $3.5B. It is currently approx $9.5B. I expect long term debt to be reduced to $6-7B. Exact amount depends on final amounts received from Alstom and Spirit deals, and how much cash they burn in the interim.
On the revenue side, it's a crapshoot. For 2020 and 2021, I expect revenues from aviation to be in the $6-6.5B range. Pre-covid, $7B in 2022 for stand alone BA seemed reasonable. Now, it is hard to say. New orders dropped sharply when the virus hit, however, long term it will likely increase demand for private jets. However, if the economy is stalled due to resurgence of the virus, and new orders do not pick up, BBD may have to slow production so as to maintain some backlog.
Assuming the economic recovery continues, $7B in revenues may be achievable in 2022 or 2023, increasing to $7.5-8B by 2025 due to increased demand and increased after market services.
Margins in aviation are currently in the 7-8% range, but should climb to the 10-12% range over the next few years. Interest charges on the debt average around 7.5%. Let's speculate that in 2022 they can produce $7B in revenues, at a margin of 9%. This would generate $630M before interest charges. If they have $6.5B LTD at 7.5%, interest charges would be $487.5M.
Therefore, I think it is
possible that BBD could produce a profit of $100-150M by 2022 or 2023. Every $100M in profit should add about $1CAD to the share price, in my opinion.
From the above, it is clear that increasing revenues, improving margins, and lowering interest expense are all fundamental to BBD's survival and success.
Jim
Skyisthelimite wrote: Does someone have realistic numbers of what the debt will be after the selling of all the divisions are finalised and what the revenus/margings could be from BA alone once the covid situation is behind us? I read around 3.5US debt and revenus around 4BUS with margins around 11%. Are those realistic numbers? And if so, what are your opinions on what the SP should be once/if the fear of going under is gone? Looking forward to a civilised discussion on this, positive or negative ;)