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SOGEN FUNDS'
JEAN-MARIE EVEILLARD ET AL.
(continued from preceding
page)
Eveillard: I believe so. Emin Leydier is expected to only earn about FF12 per share in 1997. So we're talking about a return on equity in the low single digits.
But the paper industry has barely begun to recover. The recovery really only started two or three months ago. The first quarter of this year was still very poor for the paper business generally. Therefore, those estimates continue to represent depressed sales and earnings.
And, again, adjusting their earnings to reflect their huge depreciation and paper price cyclicality can be messy.
OID: Is there a condensed, sanitized version?
Eveillard: Not really. Let me have Elizabeth Tobin give you some of the figures so you can judge for yourself
EMIN LEYDIER
AS REPORTED
FF (millions)
|
|
|
Income |
|
Equity |
|
2Not available.
3Not meaningful.
4Estimated.
OID: I see what you mean. If there's a clear pattern, it's certainly not clear to me.
Eveillard: That's because the business is so cyclical and because reported earnings are distorted by their enormous depreciation - FF125 million in 1995 and FF147 million in 1996. And it's expected to remain around FF155 million in 1997.
OID: That sounds serious, all right.
Eveillard: They're extraordinarily high levels.
OID: But I see that Emin Leydier's sales soared between 1993 and 1995.
Eveillard: Because of the new paper machine that they bought and the upswing in the price of paper.
OID: But then they nose-dived in 1996. Was the decline in paper prices the only cause or was something else happening there, too?
Eveillard: Their volume of paper sold went from 376,000 tons in 1995 to 400,000 tons in 1996. And their
Page 15 of 20
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