American Eco (ECGOF, ECX on Toronto exchange) Message Board

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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange)

ECX 1.690

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3:56 PM EST

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To: Gemini who wrote (2544)	6/16/1998 8:05:00 AM
From: david james	Read Replies (1) of 2841

Yes, Eco didn't pick a great time to say to everyone that they are moving into the oil rig building business. The whole sector dropped close to 6% today with the oil prices down to just over $12 Anyway, I don't see the price of oil having too much effect on Eco's earnings. A lot of the work at MMIndustra is related to the Sable gas fields, not oil. The rigs project just announced is scheduled to be completed at the end of 1999, so these short term price wars among the oil producers shouldn't make a big difference. The drop in oil price could reduce the number of new projects available, but I believe that MM Industra is near to full capacity now anyway. The backlog after that recent contract should now be over $300 mill - and a bunch of that is in the higher margin fabrication end of business. We've got three weeks until earnings. As everyone expects, it will be somewhere around 15 cents or so, and represent a drop from 1997. After this quarter, though, everything should start to look brighter. Earnings should be comparable or better than last year, despite a much higher tax rate. And of course, first and second quarters, in 1999 should look better than 98. My guess is that if we get coverage by Jefferies, it will be shortly after earnings. At that point they can say how much better Eco will do over the following quarters ... The new PR group is going to start pushing eco after earnings as well. David ÿ

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