do not know what this means please explain. Increase in the receivables is a deduction in the cash flow from operating activities. If something is not recognized in revenue, it is also not recognized in cost on the income statement. Are you saying something else, please let me know?
Account recivables is not cashflow obviously (since its not yet converted to cash) so the cashflow from it will be realized in q1 if they continue the historic trend of very few defaults on account recivables. Unless I am mistaken this means they will have the chance for even more positive cashflow in q1 + the modules they are allready selling in this quarter? What I mean is if they get the cash from modules sold on credit in q4 and get cash from modules sold in q1 they will get a lot more increase in cash q1 than i q4. Or as REC writes itself in the report: "EBITDA for total operations in the fourth quarter 2012 was negative NOK 42
million whilst net cash flow from operating activities for total operations was
negative NOK 178 million, a difference of negative NOK 136 million. Negative
effect of increase in receivables, primarily due to high sales at the end of the
quarter, reduction of payables and net payment of interest was partially
offset by reduction of inventories and realized gains on derivatives"
(page 10) Hopefully this high end of quarter revenue / account recivables will be realized as positive cashflow in q1.
And Rec System: Dont take my word from it take the q4 report itself:
http://www.recgroup.com/PageFiles/12233/…Q4%20report.pdf
". REC
Systems has in 2012 recognized revenues of NOK 164 million, and has
unbilled amounts of construction contract revenues of NOK 55 million and
payables of NOK 7 million to Sella Group at December 31, 2012."
(page 11)
This one i am 100% clear on. UNBILLED. So this will become cashflow later. It has never been on the revenue or cashflow statment yet.
And if you belive rec has bad operational performence I strongly disagree. Again let me quote the rec q4 report:
"Net cash flow from operating activities for total operations was negative NOK
178 million in the fourth quarter and positive NOK 1,292 million for the year
2012 compared to positive NOK 600 million and NOK 3,098 million for the
same periods in 2011, respectively."
http://www.recgroup.com/PageFiles/12233/…Q4%20report.pdf page 10.
When you know that q4 had a lot of modules sold end of quarter not yet realized as cash and rec system not yet billing Sella you know that they are rigging up q1 to be a good cashflow quarter. Also there are two one offs comming. One for sure in q1 and the other maybe q1 or q2:
http://finance.yahoo.com/news/rec-receiv…-070202480.html
(notice they kept the customer)
http://www.columbiabasinherald.com/polit…a.html?mode=jqm
(either a tax benift of 16 million $ or 16 mil $ in cash, will be decided before april 2013.)