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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Peter H. Mack who wrote (2240)	3/24/1998 5:40:00 PM
From: Nero	Respond to of 2841

Check ''Use Fixed Font'' in the response dialog box. It won't let you tab, but spaces remain fixed.

To: Peter H. Mack who wrote (2240)	3/24/1998 6:00:00 PM
From: david james	Read Replies (4) \| Respond to of 2841

An interesting analysis, but there will be some changes to the distribution of revenues and earnings in 1998. I expect considerably more revenues to come from the higher margin work of MM Industra and SRS. As they state in the 10k, the greatest growth will occur in MM Industra, SRS and Chempower. Halef is proud of his 30% margins up there at MM Industra. And they previously announced a backlog of $50 mill. From the Sable page it looks like we will be seeing a new set of Sable contracts to be announced this month and we will see if this backlog gets increased. But if we assume only $50 mill in 98 with 30% margins, we are talking pre-tax income of $15 mill - or 75 cents before tax and around 50 cents after tax. I suspect that MM Industra didn't even contribute 20 cents in 1997. Also its not clear how much much of the expenses in 1997 were due to SRS setting up in France, Venezuela and Saudi Arabia. Shipping and setting up that equipment can't be cheap with some of the main components almost the size of a railway car. Now that they are set up, we should see less set up costs and more of the profits in 1998. Furthermore, if they sell these set ups and get profits like they did with MART, we should see substantial gains (i.e. multiply the profits of MART by 3). Also, I believe all this SRS equipment was outsourced in 1997, but in 1998, much of the new equipment will be constructed at MM Industra - thereby increasing the margins. Difficult to come up with hard numbers, but I would expect the pre tax earnings from these two subs to double or triple over 1997. We still haven't heard whether the expansion of MM Industra into the Pictou site has gone through. This should allow added revenues and earnings, but also require some cash. personal.nbnet.nb.ca Pictou Industries Ltd. will be sold to MM Industra of American Eco Ltd. under an agreement in principle announced 30 Dec. MM Industra will pay Canadian$750,000/U.S.$526,000 excluding the Canadian government's wharf area, the marine railway, a common user facility and the floating dry dock. C$1.6 million/U.S.$1.1 million will be invested for upgrades using government money. Of that, C$1 million/U.S.$702,000 will be "forgiven" as long as MM Industra invests a like amount in new equipment and starts production. MM Industra will also be able to receive credit on the remaining C$600,000/U.S.$421,000 based on the number of full-time jobs created over the first three or four years of operation. MM Industra expects creation of up to 200 jobs. David