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Yes swingy , whilst it would be attractive to push a lot higher it may have alienated the existing base and so I think he will take the price up slowly but surely as our client base is increased.
Couldn’t agree more! Maybe even 3 years.
I think that ultimately what’s critical is building a loyal client base. If that means selling at 250BRL for a few years to motivate than to change their ways then it’s worth it. Ultimately in 5 years time when I retire this will be multiples of today and paying dividends.
I really hope your correct! I remember mark heyhoe suggesting in February 2020 in crux investor that they were selling at 200 reis. That year we had covid trouble so very much doubt we increased in 2020, 21 we may have increased but no communication at all was given to us so I’m going to assume we sold at 200 also last year.
Now the story has changed and I believe we now have some pricing power as sales and the kp fertil brand starts to take off. Again I hope your right, would be great. I would prefer to come at it from a slightly more glass half empty and be pleasantly surprised to the upside!
200brl was the advertised price a couple of years ago.
I think it could easily be double that now though when viewed against traditional fertilizer or competitor prices on a nutrient concentration comparative basis
If you remember way way back, the pricing structure was originally set up to track $50 USD per tonne. Back then it was 210 BRL. Production cost when they reach 400KT was touted at $7 USD.
To my knowledge there’s never been a price per tonne conveyed to shareholders since then, however the strategy was to link to the USD which would keep it in line with the imports. A Move back to $50USD would be 260 BRL. However, since then the imported fertiliser cost has almost tripled. I wouldn’t be surprised to see 350 BRL per tonne and much much higher for the small bags.
We also have to bear in mind a small paercentage of product sold may have been ordered last year on 200 reis terms. Something to think about. Which ever way you crunch the numbers I can’t find anything else on the stock market like it. Whilst very hard to predict share prices, I agree with a 50p plus sp this time next year
Personally can’t see a sales price of 80 usd tonne swingy. We were selling roughly 200 reis last year- circa 40 usd. Since then 2 price increases let’s assume 20% price rise each time. = 240-290 Brazilian reis or 48-55 usd tonne. This in my view is much more realistic. I’d suspect the opex you have used though on the contrary would be cheaper than the 15 usd envisioned - due to economies of scale and the solar instillation.
Super exciting time for the company! Anticipating q2 numbers this week.
I think over optimistic on sales price swingy, in my opinion Brian will not ramp up price too much as he is intent on building up the customer base this year , my guess is the 75p - 100p next year
If your number play out then this time next year my life will be very different.
Hi Mike,
So I figured $80USD per tonne. Costs of production $15. 200,000T = $13M. Then overheads 3M expansion works 1M leaves a profit of $9M. 185M shares.
What's sales price are you using?
I think there could be quite a bit of capex this year as we're currently building something on site. This will reduce the earnings somewhat.
200kt is 3p earnings per share. P:E of 25 (industry average) gives a share price of 75p
Last time I checked, the P:E was a rough yard stick used against the full year’s earnings, not the first half. Exciting times coming up this week. When this breaks 27o the next stop could be anywhere.
Ratio, not ration.
2021 H1 gave a loss of just over $1m.
PE is a ration against earning, not gross profit before expenses.
Also, the amount of sales orders recieved in 2021 H1 does not directly account for the revenue in H1 as a lot of those order would not have been delivered and invoiced in the period.
On 17 June 2022, Total Market Solutions reported H1 2021 total sales of 26,726 tonnes and gross profit for that period of $376,111. I assume that's in Australian dollars, once it's an Australian company, but share price is in GBP. So in GPB that's a profit of £213,051. That's an average selling price of £7.97 per tonne. Cost of transport fuel (diesel) has gone up quite a lot since then, but they will have also increased the share price. If we assume overall profit increase of 20%, gives £9.56 per tonne. If full year 2022 sales hit 200,000 @ £9.56, gives £1,912,800. It's up to each individual investor to decide a p/e ratio, if we assume 10, that gives market cap of £19.1M.
With historically 80% of the sales in the second half of the year, I’d say 200KT looks very achievable. We’ll find out next week. Good luck everyone.
The guidance from the Q1 update is below. I’m expecting higher than 50kt given the seasonality and macro-factors. I suspect their original breakdown to achieve 150kt would aim at at least 50kt this quarter and probably higher. So to reach 200kt, 60kt+ seems reasonable.
From Q1:
In calculating the 2022 target of 150,000 tonnes, Harvest assumed it would sell 8,656 tonnes in the first quarter of the year. The total sales orders of 70,200 tonnes is substantially more than initially forecast (over a 700% increase).
Historically, Harvest has experienced a seasonal sales performance with relatively modest sales during the start of the year ramping up to a buying season around mid-year, tapering off to more modest sales around the wet season at year end. Given the historic expectation that approximately 80% of sales are seasonally placed in the second half of the year, the Company is advancing its plans to meet production of 200,000 tonnes.
Remember, Q2 sales in 2021 was 18KT. The results came out on the 29th.
So what do people think will be a good result for Q2? I’m thinking I’d be very happy with 50kt which would make total sales 120 and assure the annual target is met.