Some positive comments made8 Jul 2020 10:33
It's impossible to get a clear picture about payments of invoices, but some positive comments were made at the AGM.
Q: Can the company supply details of invoices, what is currently owed, and have many accounts been written off as bad debt?
AK couldn’t answer this question due to the restrictions of the current close period, but he said:
“In terms of the general policy, for the avoidance of doubt we have contracts that are legally binding, and we expect our clients to pay us so, no, we do not intend to be writing off contractual monies that are due to us.”
AK also signalled that payment of invoices since completion has been in-line. Since the invoices for 2019 totalled $190m according to the trading update last December, this year, after price escalation, roughly $200m of invoices will be issued:
“And as we’ve said, just to re-iterate, we’ve recently said we received $96m in the five and a half months period between transaction close and today our run-rate basis, if you look at about $200m of take-or-pay revenues that the business is due that would suggest that cash collection year to date has been in line with what you would expect. There is a historic balance that we are in the process of collecting on as well, but the cash collections it’s night and day versus prior to the acquisition post acquisition as is the production performance, operational performance, cost performance.”
He says that securing payment of all of the historical invoices issued prior to completion is proving harder than getting paid for the invoices from 2019, as evidenced by the payments received for 2019 being $168.8m compared to the target of $190m according to the trading update in May. But payments in 2020 have been in-line.
Financially it is significant that production and operations at Accugas have both improved, whilst the costs have gone down.
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