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Just follow Steel copper aluminum and Nickel prices as these are the top 4 transition metals, what people say means nothing it is what they do, Ferrari now sells more EV than full ICE. Fashions fade and so do ideas.
Https://electrek.co/2023/04/07/toyotas-new-ceo-adjusts-ev-plans-but-sticks-to-a-hybrid-approach/
This is a picture-perfect example of a large corporate caving in to the eco-mob, aided and abetted (as ever) by lazy journalism.
I urge people to watch the Robert Friedland video in my initial post on this string.
I prefer scientists over activists.
Thanks, LN: will do.
Indeed dubzy
And whilst they were at it, they also explained that they did not anticipate these high levels of prices to continue ad-infinitum, ergo the cash balance for situations just like this one (or the one to come)
Hi cautionyourblast.
Have a look at Toyota's view on EVs. They maintain that the only feasible solution is hybrid.
I attach two excellent truth-bomb videos here. Peter Zeihan and Robert Friedland are both superb thinkers. Their messages are why I remain very interested in SLP as an investment (just not at current prices). There's the small matter of getting the CCP to buy in to the logic, of course.
All the virtue-signalling Torquils and Jocastas at the BBC would do well to watch and listen.
https://m.youtube.com/watch?v=8P95NFlAnmY&pp=ygUYemVpaGFuIGVsZWN0cmljIHZlaGljbGVz
https://m.youtube.com/watch?v=dWbDHovRuHU&pp=ygUQcm9iZXJ0IGZyaWVkbGFuZA%3D%3D
The BoD has historically been admirably dispassionate on dividends with Jaco continuing where Terry Mc left off. The policy is pretty clear, though they could change it of course.
I'm struggling to see a profit after tax of much more than USD10-12m at current basket price levels. A much lower FY24 FCF than FY23 will surely result in a significantly reduced dividend: that is likely to drag on PI sentiment. That said, the dividends are of course a sideshow to the underlying financials.
This is well-run company that is trading on a forward PE (on profit estimates at current basket price) which is significantly higher than it has been in the last few years (even taking account of the cash pile). I'd certainly like to buy back in at some point, but that price point well below today's price.
As a side note: EVs are virtue-signalling delusion on a global scale, but it doesn't mean that the Chinese will stop manufacturing them (coal-fired cars). PGM prices are anyone's guess but the Matthey analysis is worth reading.
Bangrak, assume short or wanting to get in at depressed levels?
I remember when many investors were screaming for the BOD to return more of their cash reserves when their cash mountain was climbing. Luckily the BOD are running the company and not retail investors. The BOD are excellent and that's why I continue to hold.
Looking forward to seeing how the company continues to diversify over the coming years.
They are however using approx $7k for rhodium.
To get to $7k rhodium for the FY it needs to go to $8.9k today and stay there until July. In the latest THS results, they said this......."We see muted upside in the short term for PGM prices. In the medium to longer term demand drivers including the hydrogen economy, possible supply cuts at unprofitable PGM producers, project delays and capital discipline versus demand for the ICE, will require a recovery in PGM prices to ensure demand is met by supply"
Your house broker (not edison) says this "We believe that the rhodium price will lift substantially in the coming quarters as destocking by glass fibre and automaker OEMs comes to an end. There is further upside risk from supply disruptions in South Africa and Russia"
Who do you believe?
The reality is, that you will not get near to what Ediison & the house broker are suggesting for earnings unless the above happens. The house broker has stated in a note "Cash margins are still positive, if minimal, at $19/oz" .40% of that is very small even if they decide not to include cap ex. Rh has averaged $4250 since the new financial year. As I've said previously if i use oil at $200 for calculations i get some really impressive numbers for my oil companies. The reality is i use an average of the next 12m futures prices updated daily and ignore analysts unless there are several independent ones.
A collapse in PGM prices and closure of mines resulting in a severe shortage of PGM's is akin to the situation we had during covid. That is your event to watch for.
SLp stated policy is to pay out 40% of adjusted free cash flow as dividends. If you take a look at the Edison report it states……
We expect ordinary dividends to reduce in FY23 to 5.8p per share, from 8.0p per share in FY22, and to 3p per share in FY24, before rising to 4.0p per share in FY25.
We expect Sylvania to continue to be cash generative with little or no debt over the next few years. Because of this ability to generate cash, we forecast cash levels in FY24 to increase to US$135m (currently US$125m) and US$152m in FY25
hTTps://www.edisongroup.com/research/lower-rhodium-prices-overshadow-strong-production/32555/
Bangrak
Thanks for your input regarding this matter. 1-2p would come as a shock to many shareholders after an 8p dividend this year and 10.25p the previous year. I personally hope they will use some of their cash pile so they can pay a yearly dividend of more than 1-2p. What do other posters on this board feel about this matter?
Owls, consensus is 3.3c so 2.6p but that is on much higher rh estimates, cash generation down here is virtually non-existent, the house broker has stated $19oz is being made so on 75k it's not much. Depends on what SLP management wants to do, if they have confidence the good times will return then they can pay whatever they like as divvy cover is ok, but if they stick to the dividend % agreed which I think was 30% or similar again it's nothing much maybe 1-2p if lucky. If I was on the BOD I would save the cash until they are sure things are recovering. Platinum doesn't do much to the profit like rh does. Ironically I was using this example in my last post about ST excitement over spot rises missing the RH contribution.....QED
Possible Platinum breakout in-play chaps.
Bangrak
Your forecasts have been accurate with regards to so many issues relating to Sylvania Platinum so please may I ask you what you believe the likely dividend will be for the next year. Taking into account the likely much reduced profit and their stated dividend policy I can only see a substantial cut in the eight pence dividend which has and will be paid this year. However the company could use some of their significant cash pile to maintain the dividend do you and others on this board consider this to be likely and if so would it be beneficial in terms of the companies share price.
Cash rich, asset rich, making money and rewarding shareholders with good dividend even when basket prices are low.
Very happy to be holding and adding here with NAV well over 90p
DYOR
Very difficult to predict Rh prices as we have seen the last few years, just at the start of covid everyone was sleeping here and missing the rise in RH price getting too engrossed in Platinum lines and charts. Cash now is around $108m or 33p a share. On $7k Rh cash adjusted per of 5 equates to 81p on $4100 its 66p. I think this is as much as you can expect. I'm quite sure this will get pulled down to sub 65p and then let's see if SLP decides to buy any..........they have refrained so far from buying so why should you buy? Tach, they pulled out $3m in cap ex spend last quarter, that was the only reason for the slight cash build and i don't like management who say "excited about things" in results when it is actually very poor out there. To make this a wow valuation and a 50% possible gain you need Rh to be over $13k, at that level i can see some possibly being interested but the house broker has $5k for LT RH price and everyone is convinced electric is the future and china is very much behind electric cars. I live in a very popular location for Chinese tourists and they are not here, China is not spending.
Tach
I totally agree with you re the price of rhodium and harsher emission standards as I mentioned in my posting yesterday.
Edison have projected Rh prices of 6000 for 2024 and 7500 after that (2025+) they also have a target rice of 118p for SLP. Harsher emission standards in 2025 should lift the price to support and it really depends on a China recovery as well. Left field we have the exploration/ JV threads which aren’t priced into your estimates Bangrok which is fair enough as they are mainly potential-think there is value there though personally. Management are top draw in SLP though which counts for a lot, I’m happy to have a core holding and trade round the edges.
Bangrak
Thank you for providing this thought provoking posting to the group who follow and own shares in Sylvania Platinum.
Yes, RH is the driving force behind the huge profits in 2020-21 and obviously, that is used in ICE mostly from China. Forecasting what it will be is difficult but I'm seeing China's adoption of electric vehicles grow well each month and glass manufacturers use alternatives, i see no huge increased demand now or positive sentiment towards ICE/RH. I think the entire electrification is far-fetched due to the reliance on China for its Rare earth minerals & other costs, but Vietnam has large stores of these minerals so I'm watching what happens. I'm going to assume that the market gives SLP a continued PER of 6-8 max, I calculate the last 3 years' peaks have averaged 6.6. Rh I'm giving an average 2024 price of $5500 which gives me a PAT of $24m, eps of 9c so 72c or 60p, a base was forming at 65p and I think this will go there again maybe lower as investors are not seeing the value here or a bounce in RH. I totally get the thinking that cash here should make a difference but I'm not seeing the trading system's account for cash, even if I use a per of 4 and include cash i get 70p. One I'm invested in that demonstrates this forgotten cash theory is Costain where the net cash pile is 48p a share and the price now is 47p but it still makes a decent profit too. I see these as no-brainer valuations that will sort themselves out when people stop whinging on about "difficulties" in the economy. I genuinely think that a lot of people assume these people who work for IC and brokers have some kind of gift but in reality, they are just normal people, also i think people who are l;ess experianced think the data on thigs like stocko is gospel but as this has proven its only as good as the date it uses, and if that dadta is incorrect (like using $13k rh) you get nasty surprises.
Bangrak
I followed advice to buy shares in this company from various sources but most especially the Investors Chronicle and built a substantial holding in this company. I had not realised how important the price of Rhodium was in relation to its future profits. I am surprised that the price of the shares has only gone down by five pence when it going ex dividend is taken into account. What do you feel should be the correct price of the shares in this company please may I ask you. I could be wrong but I believe that the price of Rhodium in the longer term may be higher than we anticipate because I believe for multiple reasons that electric vehicles will not become the norm for most people so there will be a demand for Rhodium in ICE and hybrid vehicles. I believe its likely that emission standards will change and more rhodium will be needed in ICE and hybrid vehicles. I used the cash from the sale of part of my holding in Sylvania Platinum to buy more shares in Ramsdens. You may wish to have a look at this company as it seems a great buy at the current share price.
Owls you're welcome, and if it helped direct anyone else toward reality and not paid-for corporate & media BS then that's good. Here is some more house broker BS.....Ben the broker now dropped Rh to $7k from $13k but still has Rh as $5k longer-term. So that's $7k for the year and it's done $4k after 25% of it, and the best bit he has...............$52m PAT this year 2024 after they did $1.8m in Q1..........explain HTF you get $52m PAT with $7k RH ............why not check your calculations Ben before massaging them substantially upwards?
Well Platinum is up over 2% today
5p ex-div tomorrow will see another 6% fall but SP should stay in 70s IMHO.
GLA
Good opportunity to fill-up before tomorrows ex-dividend!