George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Totally agree compound what I do worry about is the quality of the assets the chem business sale to me was a big error. Buybacks is also a point of contention for me both in RDSB and BP when they are transitioning 2 and 1.4Billion every quarter can go a long way in the transition and acquiring quality. I can't see the benefit in buying back the shares that really only supports the price short term. Whilst the share price is up from the lows it's still a way off 2020 summer when the company was in a worse state RDSB too. It just doesn't add up in my mind what the market sees but sp wise they must have a good reason to keep the sp in both where they are.
Granted we saw one of the worse disasters financially and economically and recoveries do take time I'm still astonished where the sp is considering a lot of other companies are practically recovered or only 20% off their pre covid prices when it comes to the ftse.
Welcome to the world of wokism and sandal/sock wearing investors lol. I don't know if BP and Shell can change their public image we have a good few generations who associate the brands with negative ideology. The gov also knows this and going forward the votes of those younger woke gen will begin to outweigh the previous gen.
Anyway do watch out for the job report this friday I have a feeling the market is going to play that both ways. Good numbers oh no! inflation.
Bad numbers yikes the economy is stalling.
Yes of course you are right, assets can go down in value. With O&G companies the bulk of their assets have a limited lifespan and usually depreciate in value as more oil comes out of the ground (so maybe my house example wasn't the best one, but I was trying to keep it simple). That's dealt with in the depreciation section of the accounts, supplemented by write downs / write ups when there are material changes that significantly effect the market value of the assets.
Looking at non current liabilities in isolation in a capital intensive company can be very misleading though as debt is essential for the long term viability of the company. Low levels of debt could actually be a bad thing if it deprives the company of the working capital necessary to make the long term investments which are necessary to replace the current income streams they are receiving from limited life span assets, otherwise the company would be reducing in size and profitability.
I'd be more concerned about the quality of their assets, current and future income streams/profitability, credit rating, interest cover, return on capital employed etc to get the whole picture.
It's a fair point compound but we all have our investment strats I rely on Longer term liabilities. Look at it this way assets can appreciate offsetting debt however they can depreciate rapidly too as 2020 taught us. The way I see things on BP is they are offloading certain assets to move into an unproven market however their hand is forced to sell these assets because of company image. Take the poor sale of chems business. I think it was happy that pointed out Exxon made a killig from their chem business this qaurter. The strategy of the company is going to either reward the brave or turn the company into a minnow. Like much things in life it's a 50/50 shot you're investing in potential now instead of an oil company you are looking at a company transitioning to a utilities company in which there are already bigger established players.
Mojo - you need to look at and understand the whole of the balance sheet, not just one number. Looking at non current liabilities in isolation can give you a very misleading picture of a company. You need to view it in conjunction with non current assets and also current assets and current liabilities.
As an example if a company raises £1bn in long term bonds, then that would immediately go into the non current liabilities but would also appear in the current assets so the two would cancel each other out.
It's only when debt is used to pay for operating expenses rather than the purchase of assets that you really need to be concerned. Most people do the same by taking out long debt via a mortgage to buy a house, which is usually a good long term plan as you have an asset that increases in value and saves other expenses (rent) but it's long term financial suicide using a credit card to pay your bills as you don't have an asset - the money just disappears.
BP, 5% pleasant enough. long both, but more RDSB.
Thanks Mojo.
Great post and response.
MarkGo
Happy I don't know but i've always gone by non current as a measurement of the whole picture not current liabilities. LSE does all the working out for you balance sheet wise advfn also offers the same service. The debt I'm on about encompasses the whole business pensions bonds etc.
Mojo
Net debt is long-term liabilities less cash and liquid assets (i.e. is NET of cash). It is not the total value of bonds or anything like that.
Why are you trying to find it on the London Stock Exchange website when the company is giving you the information you need to which I have posted links?
https://www.shell.com/investors/debt-information/outstanding-bonds.html
Bond info there.
Not sure what you mean?
https://www.investopedia.com/terms/n/noncurrent-liabilities.asp
It's basically the longer term bonds etc look up how much bonds shell has there's a link on their website I don't think bond holders give away money for free?
Mojo
That's not net debt.
Please refer to the latest information from the companies concerned:
RDS: https://www.shell.com/investors/results-and-reporting/quarterly-results/_jcr_content/par/grid/p0/textimage.stream/1627487961332/4e29c45e60019d73765e9953217e29935de67692/q2-2021-qra-document.pdf
BP: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-second-quarter-2021-results.pdf
I'm really not sure Mark they are getting into the utilities business which is highly regulated electric competition will be tough. Once you have governments interfering with Utilities businesses it always affects the bottom line. There is for sure short term gain I see here but sentiment hasn't changed on BP. This is going to be a captain hindsight situation in relation to the transition. I think competition will make margins difficult.
Hi Happy
Same question. What do you see as the catalyst for BP to progress. Actual return coming through on the massive green investment, return to higher volumes from September, repetitive quarters of market expectation beating results, a year of constantly high price of oil.
All or none of the above ?
Mojo
What do you see as the catalyst for BP to progress. Actual return coming through on the massive green investment, return to higher volumes from September, repetitive quarters of market expectation beating results, a year of constantly high price of oil.
All or none of the above ?
It's long term debt
https://www.londonstockexchange.com/stock/BP./bp-plc/fundamentals
https://www.londonstockexchange.com/stock/RDSB/royal-dutch-shell-plc/fundamentals
It's under the balance sheet sections
Non current liabilities.
Mojo
Where did you get these figures from?
BP's net debt is now $32.7bn not $110bn as you suggest.
RDS's net debt is now $65.7bn not $138bn.
Best
Happy
BP
Net Debt 110,426.01 m
Gross Gearing 68.03 %
RDSB
Net Debt 138,165.09 m
Gross Gearing 58.20 %
Figures doesn't take account q2 results but I think RDSB debt reduction has been far superior overall. I think the market is accounting for longer term liabilities and bp 10 year plan into the transition is still unknown hence the muted reaction.