Replies to post #8473 on Interups Inc (ITUP)

[RealDutch]

Masala Agri Corp (vertical 2) won't generate a lot of cash flow during the early years. We get 10% sweat equity and I don't think the company will be selling those shares/tokens. Even the management fee (2% annually) won't be paid in cash until the projects generate cash flow themselves, which could take 3 years for RAS and 4-6 years for oil palm and coconut. So there is basically only the 4.5% license fee that will generate cash flow early on, and half of that will go to Masala Capital and the other half to Masala Agri. Nevertheless still substantial because the projects are so huge :-) On top of that, I think Masala Agri will need cash to invest more money in Genesis Palm. Alex has big plans for it as it will deal with the retail side and export of all kinds of products derived from Palm, coconut etc. Setting up distribution centers in Lagos etc. We own 50% of that now and may very well increase our stake as it will need more money going forward. So retail could be a real big earner for us in the future besides the 5 projects themselves (at the wholesale level). But Masala Agri is also Rice (RISO, AROZ and PADDY) and the first two will generate cash flow.

Aviation (Plane Seats) could be the other big vertical. It is hard to predict the success rate. But if succesful it could dwarf all the rest. And here we do generate good cash flow early on.

So overall, it is hard to predict what to expect of future dividends. But we already discussed it the other day and I said that in general dividends won't be able keep up with growth. So I expect the dividend yield to come down from 25% currently to something like 2%. We will be targeting $0.25 quarterly next year and this will probably double or triple after a year, or two. That is the best way to look at it.

The projects is Nigeria. And the extent to which we will be disruptive with plane seats. Those are going going to be the interesting developments to watch IMO. Nigeria will give us a lot of attention. But Plane seats could become the bigger earner.