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

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

ECX 1.775

0.0%

Dec 10 3:59 PM EST

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To: Czechsinthemail who wrote (2666)	7/8/1998 6:25:00 PM
From: david james	Read Replies (3) of 2841

Dangerous information Before I provide some of the information I obtained today, let me say that this sort of information in the past has not been a reliable predictor of the price of this stock. One of the things really hurting the stock right now is that Tobecksen did attempt to move analysts estimates lower about two months ago (from the 18 cents), but told at least one institution and also told me (at the annual meeting) that he expected to have sequentially increasing earnings. That led us to believe that we would be seeing at least 11 cents. The scale at which they missed suggested that they were really blindsided by something, or they were not straight with us. Either way, it was enough to piss off a few institutions who are not looking at reasonable valuations as they dump their shares. There is also a story going around that the fund manager of one fund that had several hundred thousand shares of Eco was caught doing something illegal and the fund group dropped him as manager and started dumping his holdings a couple weeks ago. Supposedly this is the group. But I have no idea if the story is true. altamira.com I decided to call Besim Halef who is the president of MM Industra. For those of us that have followed Eco, this is the sub that we expected the greatest growth and highest margins. I asked him about what happened in May and was told that the most significant problem was that there was a delay in the topsides contract for Sable and they were forced to lay off a number of workers. These were hired back at the beginning of June. The Pictou acquisition was also delayed partly because of government bureaucracy and partly because of a general election which delayed governmental approval of the deal. That will close in about 3 weeks. I asked him about the margins he was expecting on the two recent large contracts. We talked a bit about gross margins and net margins, and he said that he expected the net margins for Eco (after taxes etc) would come in around 13% to 14% for the Amesthyst rigs and expected around 16% for the piping contract. Those two contracts involve around $100 mill over the next 12 to 18 months, so that's a contribution of earnings of around $14 mill. That does not include the topsides contract. They are also working with Chempower on some of the contracts for electrical components. He said MM Industra is now back to full capacity employing some 350 people. He expects Pictou to employ 200 to 250 people. He said the costs of upgrading Pictou was mostly paid by the government, as part of their deal and that they have a number of contracts waiting to go. Halef also mentioned that he bought a "considerable number" of shares on the open market yesterday. I talked to the VMW PR group who also said that there would be a filing shortly showing buying by members of the board. What I find curious, is that she said it will show that they started buying at $6/share.

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