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The half year report for the Comarco businesses does not make good reading from a balance sheet perspective, but the opportunity to make significant improvements in revenue and profit are very real with the recent developments.
The change to the Port status has already secured new contracts with additional revenues commencing from July and further contracts are due to be signed.
Given the onshore and offshore assets Comarco hold, they stand to be the recipient of significant contract awards from Anadarko.
AAAP are paying below NAV for the Comarco businesses. As new contracts are announced over the coming months, the price paid should prove to be very beneficial to existing shareholders.
DShox - as I said in my post, the outlook is very positive, but Comarco still posted a loss of $3.4m in the first half of the year.
It would be good to have a figure on the additional revenues expected from the signing of the new Port contracts as this should make a material difference to the outlook for the second half of the year.
For me, the news that will really set this RTO alight will be the contracts awarded from the Anadarko LNG project in Mozambique. As was highlighted in the results yesterday, the total value of the project is estimated at $70 billion.
It don’t make no sense to reverse into a company that has millions in losses so surely AAAP know with the new contracts coming in then this should change significantly to profit not losses
Carrefour - that is probably why AAAP are exchanging shares at a discount to the net assets of Comarco.
In the results Comarco have stated that they expect the income streams to rise rapidly, so I would envisage the second half will be a whole lot different to the first half.
Also, a look at the assets they own, i.e ships, barges, etc, will also help facilitate significant increases in revenue. Revenues from the Marine Services Divisions were only $471k in the first half of the financial year, yet the value of the assets is $12.4m. A few contracts from Anadarko will transform the revenues from the Marine division.
The research notes from VSA Capital when they are released will give a much more detailed picture of where the company expects the revenue and profits will come from.
A bit more patience is required, but I feel confident it will be worth the wait.