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We seek it here, we seek it there.
Many delusional posters promised 200p.
Hello??
Has the 200p turned up yet?..or was sun zelda really meaning 20p? Sounds about right.
Red again today.
RI not currently on the table, was said back at start if September.
"Currently" is key word.
We are now almost into November burning through approx 28m€ per day.
"We are now almost into November burning through approx 28m€ per day."
And where did you pluck that number from? Another twister of facts at play.
Iag is burning 195m€ per week.
27.85m€ per day. Probably more so 28m to round up but probably nearer 30m+ per day.
"Iag is burning 195m€ per week."
How do you know? It wasn't according to the latest accounts so what makes you think it is now?
Fugazi is talking about gross burn (operating costs) which is as close to an irrelevant figure you can have in a company that isn't newly formed and generates revenue. It was briefly relevant during peak covid due to the lack of revenue coming in however now it's net burn that's the only thing worth paying attention to. Sadly there are people (like Fugazi) that don't know the difference between the two or the relevance of each figure, it's just copy and pasted out of the RNS.
When we see the net burn on the 5th we can gauge what the financial runway is with their current leverage. As of their last update in July they did have a further $1.755bn undrawn revolving credit facility so the question will be can they maintain a strong enough cash position to run a full operation if required next summer. Q4/Q1 have never historically been very good for airlines, the only slightly benefit is once the US opens some of the bookings that would have been made in Q3 should happen in Q4.
Hi Bull,
Agreed. I think he is referring to the RNS which says - "Cash operating costs for quarter 2 of €190 million per week".
As you say this is before revenues are included (the clue being the words 'costs').
From what I can see from the accounts for the first half of the year the operational cash outflow (including capex) was under $1.2bn euros so less than $50m euros a week. Still not great and capex unpredictable so not sure what Q3 will show but with revenues picking up the picture is nowhere near as bad as Fugazi paints it with his misleading numbers.
But Bull, that is also like saying sales equates to net positive income. That is not necessarily the case. That is why the market and investors can only go by the last set of published data. It is a fools investment to make the kind of presumptions on here that because there are more flights, there must be more net money in the bank. As one person posted, we don't know how many bums on seat are carry over vouchers from cancelled pandemic flights. A lot of those flights might be heavily loss making at this point in time. Of course the art of speculation comes down to the sophistication of analysing 360 degrees of world events. But it isn't as simple as portrayed in films like Trading Places. It requires a significant suppression of ones own bias.
My inner bias with IAG is being risk averse and therefore being very cautious and sensitive to broker comments, especially when there is more reference to dilution latter on. I also don't like the silence from IAG. There are overtones of bad events from the past with big top heavy debt laden corporations that have lost their way in their market. IAG have had there's pulled away under their feet for a very long time.
The 360 says look out for state help, even form a Tory government. Most other airlines, even with the IAG group, are out cap in hand. But the 360 also tells me BA might be too proud and snobbish to so such a thing. Perhaps there will be some help targeted at airlines in the budget. The 360 says there should be. But the 360 also tells me that this government is completely consumed with all the 'green crap' and is highly susceptible to image with the environmentalists. [I note the Telegraph has been very brave and put up news stories showing some truths about the extent of support for all this climate change rubbish. I know I am not alone in my opinions of it, for a brief moment we are getting a peek at what other people also so think. And considering at least 15 years of intense one-sided heavy handed propaganda right across media, the result is a majority of people want to vote on the main climate change policy to reject it - very revealing!]
Big bull: GREAT POST !
"But Bull, that is also like saying sales equates to net positive income. That is not necessarily the case. That is why the market and investors can only go by the last set of published data."
Yes, and the last set of published data showed positive cash flow of around £3bn from revenue for the first half of 2021.
Got a flight last night after my business meetings. Pleased to report long queues at T5 arrivals. Numbers are on the up. almost 400 flights today according to ba.com. By my calculation, they should be carrying above 50000 people.Not bad!!DYOR.
Hexam, I specifically said 'net positive income'. This does not equate to a positive cash flow. Q1/2 you say has a 'cash flow' of 3bn out of an unspecified revenue. How much of that cash flow was derived from sales, and how much was derived from the credit drawdown? Corporations are very adept at smoke and mirrors with the numbers. If BA sells a seat for £1000 and the cash is on the books the next day that is cash flow into the business. But if overheads for that day are £1001, that is a net negative income. The company then draws £1 credit from the credit card to cover the overhead. That is a total cash flow of £1001, but the income for the business is zero.
The numbers form the likes of IAG will need very careful scrutiny.
Dumber and dumber starting to be found out....
Oh dear
All $3bn was from sales. Any credit drawdown is shown clearly and separately. Suggest you look at the accounts if you wish to check.
Hexhum, you have no business experience .
Read cash burn. 195m pw and mounting.
Refinancing required, Oh dear.
Cash burn is not €195pw the RNS clearly states "Cash operating costs for quarter 2 of €190 million per week".
My business experience that you refer to extends enough to know that costs and revenues are different. It also means I can read accounts and these show overall cash burn was less than €50m pw for the first half of 2021 before allowing for any loan movements.
I'm pretty sure you are employed to flood the board with your negative views but please at least make sure your 'facts' are accurate.
Your clearly angry fugazi... learn about business before posting
So sad i can' t read the posts as filtered, little fugassin!! the importance of his posts is ZERO. Lots of green lines which means he is angry!!!ahahah.
" BUY" from me, £2.00 soon enough!!! T5 busy. Flights busy. Wait for Nov , flights galore not to mention Dec! Has anyone seen the number of flights for sale in DEC?? huge numbers. NOT selling anything, only accumulating now. Sold a chunk at 1.83 but purchased again lower. More money, i feel greedy!! DYOR.
Not knowing the difference between cash operating costs and net cash burn would suggest your opinions are misguided
Cash Operating Cost refers to a cash flow statement which effectively follows all cash types of business expenditures. ... Such expenses are derived from the firm's information on financial accounting. It does not matter if the expense items are variable or fixed.
https://www.financial-dictionary
Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. ... A company that is profitable and generating cash has a "negative Net Burn". A company's Gross Burn is the total cash spent on operations.
https://www.klipfolio.com/metrics/difference/gross-burn-vs-net-burn
IAG, which also owns Aer Lingus, Iberia and Vueling, has a weekly cash burn rate of 175 million euros while most of its fleet is grounded due to restrictions, meaning its focus over the past year has been on raising funds.
May 11, 2021
3:31 PM BST
Last Updated 6 months ago
https://www.reuters.com/business/aerospace-defense/british-airways-owner-iag-boosts-liquidity-with-825-mln-euro-convertible-bond-2021-05-11/
825mil bond in May, say 4 months eq cash burn, so 16 weeks is 2800mil. Even if you add in revenue since July EU flights opening up, say reduce the 175mil per week to 2 months only, that is still 1400mil. The point being the burn rate, the amount going out even under the most optimistic scenario has burned through the bond issue a while ago. And the numbers for the bond issue were assuming a return to full travel by July. For IAG's main revenue market, the return is still a couple of weeks away and a lot of those seats will be vouchers carried over from previous calculations.
There is a reason why 4 brokers made the extraordinary public statements that the company needs a cash call of the form of an RI. Precisely how the finances are to be repaired is the next big question. Red flag for me.
The burn is certainly not 50mil per week, that would mean IAG are bringing in 125mil a week to break even without their main market and with flight numbers only improving markedly over the last month or so with changes o the traffic light system. The burn rate is most likely over the 150mil mark on average since May and they will have been drawing on credit for the last month (I suspect). The bond money probably ran out in mid September causing the broker comments.
If anybody has more recent verifiable numbers then please post, I haven't time to do deep searches or whatever today.
@BB,
"For IAG's main revenue market, the return is still a couple of weeks away and a lot of those seats will be vouchers carried over from previous calculations".
Your statement not always correct because:
1) a lot of refunds were made months ago.
2) my friends used 1 and only voucher at xmas 2020. Now purchased a holiday to maldives.
3) I had 3 flights refunded but then booked 2 flights in summer and 1 for this November coming.
Many more examples out there of people NOW paying for flights. Not necessarily always vouchers.
Money is coming IN my friend! DYOR.
So you are repeating the same false number that Fugazi is except for Q1 rather than Q2 i.e. 175 million euros which got reported erroneously as cash burn in the press (whereas it is in fact 'Cash operating costs') though at least the FT got it right when they reported it for Q2.
The accounts that I pointed you to are up to date as at 30 Jun and clearly give the net cash burn but you chose to ignore that and did a 'deep dive' rather than just look up a number.
The accounts show clearly that for the first half of 2021:
"Net cash flows from operating activities" = -€1.13bn and
"Net cash flows from investing activities" (which includes net capex) = -€0.032bn
Together these give the cash burn BEFORE new loans or repaid loans etc. of under €1.2bn for 6 months.
This is less than 50m euros per week.
So unless you think IAG are guilty of false accounting (in which you're welcome to take it up with the relevant authorities) please can we stick to actual, verified numbers.
You quote account numbers for the first half of 2021. But isn't that where my references come from? I did a superficial search for round numbers to do a very ballpark estimate and those numbers are quite prominent. The source is Reuters, if the 175mil is incorrect, it would have been updated and the only accessible reference would have been the amended article. If you have a reference of a similar reputation (not just somebody's blog or a low level would be journalist) then please post.
You have reference 'net cash flow' but then describe it as 'cash burn' despite my posting descriptions that the two are not the same, as I believe you originally pointed out. You can not derive from the numbers you reference a cash burn, i.e. the rate the company is burning through it's cash reserve. You are quoting cash flow to pay for operational activities which is itself only one part of the outgoings picture, you are not quoting how much of the cash is being used. Your 50mil figure is therefore not valid in this context.
I stand corrected, the 175mil per week cash burn was updated in Jul. To 190mil.
"The company is burning through €190m in cash a week"
https://www.ft.com/content/6108449f-7392-47e7-b4a5-12ebacd03fce
JULY 30 2021
Of course, cash burn doesn't take into account revenue, but the overall point is that the opening up of air travel has been delayed, sabotaged and subject to inconsistent and political interference. You wish us to believe that IAG has been taking in 140mil a week since, what May, June? I would suggest if that were the case, the sp would be at least double it's current value.
So my latest cash burn figure is from 30/7/21 at 190mil (Euros). Has anybody got a more recent one?