Zeev, thanks for volunteering to shed more light!
For breakeven I started with the 1800 laptop batteries per day (at $2.50 per watt hr or about $75 each revenue) as stated by Lev Dawson. Anything more would be profitable and line 1 should be able to make 2500 per shift with an ultimate 4 million per year.
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If the first 1800 laptop batteries breaks them even, the revenue from additional line 1 batteries and all additional revenue contributes more directly to profits. If you look at the 1 mln cellphone batteries per month for the Hanil joint venture, we know they believed it was a good business decision to invest 100% of the capital for their plant and still feel ok about things when they give half the profits to their JV partner, Valence.
What I infer from this arrangement, is that Valence's profit margins should be about twice Hanil's profit that they built their plant for, and are therefore quite high.
The NI tax rate is something like 8% of the cost to produce multiplied by a general 33% rate resulting in about 2.6% tax. There should be about $35 million in subsidies from the Irish government, pro-rated when Valence ships their first $4mln in product. As far as US tax is concerned, it would appear there should be no effect on approximately the first $140 million profit because of losses carried forward on their 9 years without revenue, other than the $50k per month from Delphi during their joint R&D.
So there are some numbers for you to start with. I would be interested in your own earnings estimates per category of battery's and per production line. I understand we should expect another Italian machine before long and there could be two more on order for early to mid next year.
Obviously, as more staff and equipment are added, it will gradually take more than the first 1800 batteries from line 1 to break even. As I see it, they will soon have to work an entire 8-hour shift and maybe part of the second shift to break even as head count increases. |
