I see,It is not profit as such. Whilst the retail price exceeds the marginal cost of supply (ie the cost avoided if consumption is reduced or households generate some of their own power), the extra cost is largely needed to cover the fixed (non-volume related) cost of maintaining the network.
That is, half the cost of supply (roughly) would still exist regardless of consumption levels and that is my point. This cost must be recovered somehow, and if net consumption is going to seriously fall then that precludes recovering the fixed costs in the conventional manner on a cents / kWh basis.
It's like how the car costs a lot of money just to have sitting there even if not used. Those costs have to be paid, by whatever means, whether the car travels 100,000 km or just 1 km per year. Trouble with electricity is that if you recover the costs on a cents / unit of consumption basis as is normally done, it all falls apart economically if consumption falls in a big way. Either that or charges have to be massively hiked which hurts the poor, renters etc unable to lower consumption levels.
A hint of which direction it will go is after the books close on the new issue, before the announcement of how it has gone. If a large holder has not taken up their entitlement, then they are likely to sell their other stock, because they know the announcement of them not taking up the entitlement is a negative for the market.
brty
It looks like that the opposite has happened. Big buyers jumping in early, not even waiting for the rights to close
Not much happening here, SP has been pretty stagnant for a while.
I heard there's an article in the Financial Review with an interview with Brendan Dow. In it Dow mentions there are hundreds of orders in the wings which should be finalized by the end of this year along with a 25 unit order from Energy Australia that should be signed within the next two weeks.
Might explain the small lift in SP this morning.
cheers
CFU completes 2 years testing with EWE:
http://translate.google.com.hk/tran...&hl=en&sa=X&biw=1280&bih=547&tbs=qdr:d&prmd=n
even translated it for you
A bit of a SP slide today
Any ideas ?????????????
Is there a pending announcement that we do not want to hear?
Been off air and catching up. There seems to have been plenty for CFCL to report, lots of promising signs, but the big orders have yet to arrive. They are spending $ and back of envelope calculation gave me about 16 months (5 quarters) cash left*. Is that a reasonable amount of reserves?
I think my average holding is 21c, so their price (13.5) is attractive.
*Please do you own calcs I am no expert.
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