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Sharegar forget that question about salespersons
Sharegar
It's OK , what was throwing me was the AUD price being affected by the REAL currency swings
They have 8 sales staff , is this what they refer to as consultantsin the accounts do you know?
chique,
You ask me:
can I ask how you are arriving at your profit figure?
The answer was already included in the post you are referring to. So have another read.
I also include a caveat to put the figures the company provide into context.
Thanks for that clarification makes a big difference
At 400kt with a 20% uplift in sales price-
24m aud rev
4m aud opex per tonne at 10 aud a tonne - Mark heyhoe mentions 7.5 usd opex once we’re generating 320kt due to economies of scale. Since then real has depreciated vs usd so these would come down even more so a long term 10 aud opex per tonne is reasonable in my view.
So 10 aud x400,000kt = 4m aud + the 3m aud running costs= 7m aud
24m aud - 7m aud = 17m aud profit at 400kt.
We’ve no idea what the new project may or may not produce but that’s another exiting add on that could definitely add to these numbers in time.
Harvest sell their product for 200 Brazilian real = 50 aud when converted. This has been stated several times in crux interview with mark heyhoe, Brian McMaster interviews etc. They always have sold at 200 real. The depreciation in the real tho has meant over the years they effectively receive less when converted back
T1995
Where did you get the 50 AUD from?
The yearly report shows revenue 1,952,159 for 54,155 tons which is 36.05 per ton AUD
A 20% uplift in sales id think that would be the minimum uplift given wider fertiliser costs would just go to the profit so a 20% uplift would see 570,000 added to the 2.85m figure = 3.42m aud profit
Okay chique I converted to usd. I’ll stick to aud.
So 3m aud a year business basic running costs.
200 real sales price = 50 aud = 50 aud x150,000 next years target= 7.5m aud
Opex for producing 150,000 = 8-10 usd = 11-13 aud =
11 aud x150,000 = 1.65m aud or 13 x150,000 = 1.95m aud
1.65m + 3m aud = 4.65m aud or for the higher opex 1.95m + 3m aud = 4.95m aud
7.5m aud ~ 4.65 for the lower opex = 2.85m aud profit.
This is no price increase which we know is coming. What that price increase is to be determined and I believe the company stated more information around this for the year will be out this month. Cheers
Sharegar
I am keen to know if I have something wrong here
from the yearly report I have a sale price of 36.05 AUD per ton and a cost price of 13.12 AUD per ton giving a profit of 22.93 AUD per ton
With a 20% uplift in sales price this rises to 43.26 AUD per ton and profit of 30.14 AUD per ton
can I ask how you are arriving at your profit figure?
Just to be balanced for the sake of trading4good :-)
400k tons with a 20% uplift in price might give a GP of 12,000,00 AUD and a net of approx 9million AUD
Sales guidance from RNS 10 Jan 2022:
"2022 Sales guidance established at 150,000 tonnes, or 76% increase from 2021
Substantial sales orders for 2022 started to be placed towards the end of 2021."
My calculation if this rate of growth continues:
150Ktpa x 76% increase = 264Ktpa for end of 2023 figures.
264Ktpa x 76% increase = 465Ktpa for end of 2024.
That would be nice.
GLA Sharegar.
Forgot to add the m. Just to be clear I am not ramping and suggesting a b
The company has the following ambition (see website Homepage: Why Harvest Minerals?).
At 450Ktpa expect EBITDA of US$21.45m.
Sector average P/E is 26.75
Equals a valuation of US$360m.
ps
as the report is in AUD I am only using AUD here
Worth remembering.
Interesting snippet from RNS: 18 July 2018
"Covering 14,946 hectares and located in the heart of the Brazilian agriculture belt in Minas Gerais, Arapua is a shallow, low cost mine with an indicated and inferred resource of 13.07Mt at 3.1% K2O and 2.49% P2O5. This is based on drilling just 6.7% of the known mineralisation, leaving significant upside potential. This resource is equivalent over 29 years' production and the known mineralisation expected to support 100+ years' production at 450,000 tonnes per annum."
The company has the following ambition (see website Homepage: Why Harvest Minerals?).
At 450Ktpa expect EBITDA of US$21.45.
Sector average P/E is 26.75
Equals a valuation of US$360.
The figures given will need an update for accuracy at todays margins. However, this gives an indication of what is possible.
We are all experiencing higher prices these days but history tells us that this is normally to the enormous benefit of commodity companies.
If our sales continue at the current protectory we could actually be talking about 450Ktpa by year end 2024/25.
The talk about Directors remunerations will be of little significance.
This does not take into account the plans for the recent additions of the Lime and Phosphate projects in 2021.
GLA Sharegar.
trading4good
This is a debate about the figures and you can challenge with fact or talk about motives , but all I am doing is to put the actual figures from the accounts and trying to get some idea as to what profits to expect.
I have not used a 20% increase in sales because I did not see that in an RNS ?
T1995
using your 20% uplift in sales price I get
Gross Profit 4,521,000
profit after base costs 1,580,000.00
Do you agree with that approximation T1995?
At £10.5m mcap. With £2.2 profit this year. 74% yr on yr growth. Cash in the bank, management stating dividends will be on the cards, 3m tonne market just for coffee on their doorstep and 3x that for sugarcane market. Selling into Paraguay now. Excellent organic growth projected. As of today very conservatively I believe we should be 10p even though a 10pe is laughable with that growth and market on our doorstep. Medium- long term holders will see multibagger in the next 18months IMO
Disagree trading4good, I welcome the discussion, it’s healthy. If it were smalleyus up to his usual antics I’d agree with you. I am very bullish over and short, medium and long term, and hold a large chunk of shares.
I’m no expert at all at balance sheets etc, but if we look at half year report on 29th September 2021. I’ve added up all basic costs in those accounts for 6 months ended 30th June 2021 and they total 1.53m aud so if we double for full year we get approximately 3m aud for easy numbers. These are basic costs, directors fees, expenses, accounting etc.
3 million aud = 2.2 m usd. We know the product sells at 200 reals = 36 usd. 36x 85,000 = 3.1 m usd. We now have the costs to produce the product which mark heyhoe quoted when they were doing 50,000 and product was selling for 50 usd equivalent that costs were 17.50 usd so at 36 usd price we can assume ruffly a 13usd cost ruffly. 12x85,000 = 1m usd cost. So yes you have 1m added to the 2.2m usd of running the company = 3.2m usd. So you could say we will be breakeven this year on a basic level. We’ve had some expansion to the mine and solar panels installed, they are all one off costs however. Mark heyhoe has left and with economies of scale our costs should come down greatly again next year as we get a nice uplift in sales to 150kt.
As of June 30 2021 we had 1.6m usd cash and our second half of the year is where the real buying occurs so I would expect cash position to be similar as of today. Also as of June 30th we had 1.6m aud in receivables = 1.15m usd to be received.
As for full year 22 I really expect a minimum 20% price increase= 240 real = 44 usd. 44x 150,000 sales target = 6.6m usd. Let’s keep basic costs the same at 2.2 and assume with solar panels and economies of scale cost per tonne to mine is 8-10 usd = 1.2m or 1.5m usd cost to mine per tonne = 1.2-1.5m usd. Add that to the 2.2 = in the region of 3.5 m usd. 6.6m usd ~ 3.5m leaves a 3.1 m usd profit for year end this year.
Welcome the discussion and feedback. A couple of notes- mark heyhoe has left the company as his job of seeing the mine through build etc is done, he left H2 2021. Potential cost saving for 22 and beyond. We tend to meet our sales targets and have a good guide on what farmers want to buy. And the price increase could be more. With wider fertiliser costs going through the roof we could see a nice increase. I’ve used 20% and I see that as being a conservative figure. Best to work conservative though in my opinion.
I believe the opportunity for organic growth is huge here. We have cash, Brian stated that a month ago saying “we have a couple million dollars in the bank” we have 74% yr on yr growth in sales and a price increase to match and a mammoth market on our doorstep which we’ve only just scratched the surface of! My second biggest holding and I expect a dividend within 18 months. All in my opinion and please DYOR
Breakeven has moved up from 40kt for sure, more sales staff, also they didnt give out directors bonuses last year because of share price performance, so I'm expecting a modest profit for 2021, and hoping we can get to 200kt sales in 2022, otherwise nowt all for shareholders.
Unless costs are reduced more this puts the true breakeven ( not including depreciation , impairments , foreign exchange ) at approx 130k tons - unless I am missing something!!
Have reduced general expenses and consultants by app 600k
Have you allowed for the cost savings identified in the 17 Mar 20 RNS. 400k plus further during the year from G&A.
I have reduced consultants fees and other expenses by quite a bit - I don't know if I am correct in doing this so really a guess
This is my estimate for y/e 22 - I like this companies product and would like to invest and so am welcoming the input
Sales Revenue - 5,407,500 ( based on 2021 sales price)
Cost of sales - 1,968,000 ( based on 2021 cost price )
Gross Profit - 3,439,500
Basic Costs
accounting fees - 150,000
advertising - 245,000
directors - 788,000
consultants - 200,000
legal - 20,000
wages - 359,000
public company costs - 219,000
rent - 25,000
travel - 485,000
other expenses - 450,000
Total basic expense estimate 2,941,000
profit after basic expenses 498,500
I know they have mentioned a possible price increase for 2022 , but there may be increased costs also