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Sorry that concludes what I am able to post from Berenberg note.
SXXP MSCI Metals
& Mining
1mth 10.4% 7.2%
3mth -9.1% -0.4%
12mth -66.3% -67.2%
Profit and loss summary
USD m 2019 2020 2021E 2022E 2023E
Revenues 652 829 736 803 748
EBITDA 293 439 370 404 323
EBITA 177 314 241 281 202
EBIT 167 313 241 281 202
Associates contribution - - - - -
Net interest 6 2 1 1 1
Tax - - - - -
Minorities 0 0 0 0 0
Net income adj. 77 157 169 194 114
EPS reported 0.08 0.14 0.15 0.17 0.10
EPS adjusted 0.07 0.14 0.15 0.17 0.10
Year end shares 1,156 1,156 1,156 1,156 1,156
Average shares 1,153 1,153 1,156 1,156 1,156
DPS 0.04 0.09 0.09 0.06 0.04
Cash flow summary
USD m 2019 2020 2021E 2022E 2023E
Net income 173 315 242 282 203
Depreciation 116 125 129 123 121
Working capital changes -25 10 -62 -11 14
Other non-cash items -15 4 -1 2 2
Operating cash flow 249 453 308 397 340
Capex -93 -139 -229 -204 -181
FCFE 156 314 79 193 159
Acquisitions, disposals 7 7 0 0 0
Other investment CF -159 -313 -79 -192 -158
Dividends paid -81 -139 -81 -82 -63
Buybacks, issuance 0 -3 0 0 0
Change in net debt 4 -13 61 -24 -9
Net debt (cash negative) -278 -291 -231 -255 -264
FCF per share 0.13 0.27 0.07 0.17 0.14
Growth and margins
2019 2020 2021E 2022E 2023E
Revenue growth 8.1% 27.0% -11.2% 9.1% -6.8%
EBITDA growth 13.7% 49.7% -15.6% 9.1% -20.0%
EBIT growth 13.1% 87.5% -23.1% 16.7% -28.2%
EPS adj growth 14.6% 104.4% 7.5% 14.8% -41.0%
FCF growth 15.3% 102.1% -74.8% 143.2% -17.5%
EBITDA margin 44.9% 52.9% 50.3% 50.3% 43.2%
EBIT margin 25.6% 37.8% 32.8% 35.1% 27.0%
Net income margin 11.8% 18.9% 23.0% 24.2% 15.3%
FCF margin 23.9% 37.9% 10.8% 24.0% 21.3%
Key ratios
2019 2020 2021E 2022E 2023E
Net debt / equity -21.5% -22.6% -16.6% -16.9% -16.9%
Net debt / EBITDA -0.9 -0.7 -0.6 -0.6 -0.8
Avg cost of debt - - - - -
Tax rate 0.0% 0.0% 0.0% 0.0% 0.0%
Interest cover - - - - -
Payout ratio 60.6% 66.5% 62.4% 36.0% 43.1%
ROCE 12.8% 23.7% 16.9% 18.3% 12.7%
Capex / sales 14.3% 16.8% 31.2% 25.4% 24.2%
Capex / depreciation 80.7% 111.5% 177.0% 166.3% 149.5%
Valuation metrics
2019 2020 2021E 2022E 2023E
P / adjusted EPS 22.7 11.8 9.4 8.2 13.9
P / book value 1.3 1.4 1.1 1.0 1.0
FCF yield 4.3% 8.1% 1.2% 6.7% 4.5%
Dividend yield 2.7% 5.6% 6.7% 4.4% 3.1%
EV / sales 2.3 1.9 1.9 1.7 1.8
EV / EBITDA 5.1 3.6 3.7 3.4 4.2
EV / EBIT 8.9 5.1 5.7 4.8 6.7
EV / FCF 9.5 5.1 17.4 7.1 8.5
EV / cap. employed 1.1 1.2 1.0 0.9 0.8
Key risks to our investment thesis
? Gold:Gold:Gold:Gold: With no financial gearing (no debt), Centamin has lower-than-
average sensitivity to the gold price. Given the strength of the
balance sheet, the Sukari mine will survive a lower price than most.
? Updated mine plan:Updated mine plan:Updated mine plan:Updated mine plan: The updated mine plan, due before the end of
2021, could materially alter our long-term assumptions for both the
open pit and underground mine.
Cont
19 October 2021 Reuters CEY.L
? We retain a Buy recommendation for Centamin, as we believe that
the recent capital markets day provided clarity about the medium-
term production profile. Centamin retains a solid balance sheet and
should produce 450koz-500koz over the longer term with a
sustainable dividend of at least USD100m/year.
? Price target and rating:Price target and rating:Price target and rating:Price target and rating: Our price target, based on 1.2x NAV and
6x EBITDA, is GBp134 (down from GBp137).
? Valuation methodology:Valuation methodology:Valuation methodology:Valuation methodology: We value Centamin on an equally
weighted blend of NPV (10%) and EV/EBITDA methodologies to
generate our GBp134 price target (from GBp137).
Bloomberg CEY LN
Current price Price target
GBp 98 GBp 134 Market cap (GBP m) 1,127
19/10/2021 London Close EV (GBP m) 989
Trading volume 7,350,000
Free float 98.0%
Non-institutional shareholders Share performance
Management: 2% High 52 weeks GBp 164
Low 52 weeks GBp 90
Business description Performance relative to
Centamin is a single-asset gold producer
operating the Sukari mine in Egypt. Sukari
has been in operation since 2009 and has a
20-year mine life from today.
Cont
The main catalyst
for the shares should be the upcoming life of mine plan for Sukari that is
scheduled for 1 December. In our view, the shares remain well supported
by the balance sheet and a high minimum dividend – of USD105m – set for
the year, with a yield of 6.7% for 2021.
19 October 2021
BUY
Current price
Price target
GBp98
GBp 134
19/10/2021 London Close
Market cap (GBP m) 1,127
Reuters CEY.L
Bloomberg CEY LN
Changes made in this note
Rating: Buy (no change)
Price target: GBp 134 (137)
Estimates changes
2021E 2022E 2023E
old ? % old ? % old ? %
Sales 773 -4.8 803 0 748 0
EBITD
A
408 -9.2 404 -0.1 323 -0.2
EPS 0.17 -12.8 0.16 3.4 0.10 -0.3 Source: Berenberg estimates
Share data
Shares outstanding (m) 1,156
Enterprise value (GBP m) 989
Daily trading volume 7,350,000
Source: Thomson Reuters Datastream Y/E 31/12, USD m 2019 2020 2021E 2022E 2023E
Revenues 652 829 736 803 748 EBITDA 293 439 370 404 323
EBIT 167 313 241 281 202
Net income (adjusted) 77 157 169 194 114
EPS (reported) 0.08 0.14 0.15 0.17 0.10
EPS (adjusted)EPS (adjusted)EPS (adjusted)EPS (adjusted) 0.070.070.070.07 0.140.140.140.14 0.150.150.150.15 0.170.170.170.17 0.100.100.100.10
DPS 0.04 0.09 0.09 0.06 0.04
Dividend payout ratio 61% 66% 62% 36% 43%
Dividend yield 2.7% 5.6% 6.7% 4.4% 3.1%
Capex -93 -139 -229 -204 -181
Free cash flow 156 314 79 193 159
FCF yield 4.3% 8.1% 1.2% 6.7% 4.5%
Y/E net debt (net cash) -278 -291 -231 -255 -264
Net debt / EBITDA -0.95 -0.66 -0.62 -0.63 -0.82
Gross margin 30.2% 40.0% 35.1% 36.6% 28.7%
EBITDA margin 44.9% 52.9% 50.3% 50.3% 43.2%
EBIT margin 25.6% 37.8% 32.8% 35.1% 27.0%
ROCE 12.8% 23.7% 16.9% 18.3% 12.7%
P/E 22.7 11.8 9.4 8.2 13.9
EV/EBITDA 5.1 3.6 3.7 3.4 4.
Cont
Berenberg
Q3 an incremental miss; guidance maintained
? Q3 light on lower throughput: Centamin has announced Q3 production of
103.5koz from the Sukari mine in Egypt, versus our expectation of 109koz
and consensus of 107koz. A total of 2.9Mt was mined from the open pit at
an average grade of 1.02g/t, while the company mined 201kt from the
underground mine at 4.47g/t. Grade from the open pit was above our
expectation, with higher grades drawn from the Stage 4 West area. The
waste-stripping programme is also progressing well, with both the owner-
operated and Capital-operated programmes 17% ahead of schedule. The
good performance of the open pit was offset by lower grade and volumes
from the underground mine being below our expectations. This appears to
be at least partly down to contractor underperformance, with a tendering
process for a new contractor underway. Production was incrementally
light due to lower processed tonnes – at 2.885Mt versus our expectation of
3Mt, with lower plant throughput driven by maintenance during the
period, including a mill reline. Recoveries at 88.7% were in line with our
expectation. All in sustaining costs (AISC) were USD1,266/oz (Berenberg:
USD1,1875/oz/; consensus: USD1,218/oz) and revenue for the period was
USD183m (Berenberg and consensus: USD194m).
? Trimming production expectation: We have trimmed our 2021 production
expectation – from 429koz at an AISC of USD1,183/oz, to 413koz at an AISC
of USD1,229/oz. This compares to guidance – which has been maintained
– of 400koz-430koz at an AISC of USD1,150/oz-USD1,250/oz, with
management now flagging the midpoint of the range as the likely landing
point. Capex guidance has also been maintained at USD225m, with ytd
expenditure of USD67.6m. Centamin maintains a solid balance sheet, with
no debt and USD256.1m of cash – although FCF generation remains muted
at present due to the high amount of waste being mined as part of the
catch-up stripping programme.
? Maintain a Buy, cutting price target: We maintain a Buy recommendation,
but our price target pulls back from GBp138/share to GBp134/share based
on unchanged multiples of 1.2x NAV an 6x EV/EBITDA.
Cont