I have to redo this and use 40% gross margin for consultancy. Actually I'm going to cut it in half again due to delays in payment.
So we can actually calculate the cash slow for SIAF in 2020/2021
Cost = Capex = 70% of $363M = $254M
Benefit =
(1) CA resale (15% gross) of 1,737M = $260M
(2) 30% consultancy = 50% of 40% of 30% of $363M = $22M
(3) 55% ownership = 55% of $216M pos cash flow = $119M
Total benefit = $401M
Difference = +$147M
There is still a delay in getting paid for consultancy, but you can see that the project is generating good cash for us. And the crucial aspect in all of this is CA (resale). So even if we own only 25%, the cash flow situation may actually improve. Let's check those numbers and compare with the $234M
Cost = Capex = (70/55) * 25% of $363M = $115M
Benefit =
(1) CA resale (15% gross) of 1,737M = $260M
(2) 69% consultancy = 50% of 40% of 69% of $363M = $50M
(3) 25% ownership = 25% of $216M pos cash flow = $54M
Total benefit = $564M
Difference = +$249M
It doesn't change much although 55% ownership is relatively looking better now.
It still isn't right, because there will always be delays in payment for consultancy, whether we own 0%, 25% or 55%. Or perhaps this is as close as we can get.
