RE:Confused & WonderDadsaid2 wrote
Im a bit confused on the debt...bank debt 42 mill + working capital deficiency ??? of 20mill = net debt of 62 mill same as Q2. Working cap deficiencies sucks. I wonder how the analysts will interrupt this little twist and affect ratings. Never the less, shareholder returns are good but the dumb a$$ market can be frugal ..GLTA
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Yes CJ is starting to play some games with their press releases. In the second quarter report they bragged about "Net debt" being payed down $85 million. In this report they only talk about bank debt being payed down to $42 million. The reason is when you add in the huge increase in working capital deficency net debt is actually aprox. $62 million just as it was at the end of the third quarter.
They also have stated that they planned to be debt free by the end of this year. With $62 million in net debt at the end of the third quarter there is no way that will happen. Debt will still be at least $35 million by the end of the year. Instead of admitting that they will not be achieve their goal of zero debt by year end they are now talking about paying off all debt next year.
Do they think that none of us know how to add? Sometimes things dont work out as planned. Just admit it and move on instead of playing games. I would bet that as they did pay down aprox. $85 million in net debt in the second quarter stating that they payed down zero in the third quarter would not make them look very good. Playing games with the numbers to try and fool shareholders doesnt make them look that great either.
At the same time not trying to throw the baby out with the bathwater CJ by year end should have a net debt of aprox. $35 million. At the end of 2020 they had a net debt of aprox. $246 million. For many years after oil prices collapsed in 2014 CJ with that heavy debt load and even higher would be lucky to make $40 or $50 million in Free Cashflow per year with oil prices in the $50 range. Now with a quarter billion in debt payed off due to the last years high oil prices and $90 oil CJ has Free Cashflow per year of aprox. $240 million with soon not a penny to pay to the banks.
Its looking very good even if they are full of Bull Sheet.