Then of course there's still the $2 million in "corporate" expenses that have to be covered.
kezzek Share Tuesday, August 23, 2011 3:22:41 PM
Re: Steady_T post# 130866 Post # of 130879
I disagree. Each machine has its own costs - waste plastic, separation of plastic from other waste, moving plastic to processor, processing it through machine, including catalyst, energy and labor required to produce output, disposal of remaining waste, and other costs.
Remember, P2O had revenues of $86k, only $47k of it from fuel. They had $2.6 million in losses over 3 months of which only $200k was R&D. Who knows how much of that $2.4 million were really direct costs of producing the fuel. CGS is a highly subjective number.
If you take the whole of P2O, (excluding corporate losses of $2 million for the quarter), you have a negative net margin from that LOB of about 3,000%. That means for every $1 of revenues, it cost over $30 to produce it.
I would hope margins will improve, but the 3,000% improvement necessary for just P2O to reach breakeven seems unlikely without a massive capital investment, which seems unlikely before major margin improvement, which seems unlikely, well, you get the idea.
Then of course there's still the $2 million in "corporate" expenses that have to be covered.
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