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Your right about the rouble Meno. When I meant stabilised I meant back to average and the current discount reflects the current situation as it's the best data we have to work with IF evraz was able to trade today. I still have hope a ceasefire will happen at some point.
The Kremlin have insisted they submitted a draft proposal regrading peace talks back Ukraine which Ukraine denied receiving. For some reason I believe the Russians, the Ukrainian must be buying time to see what sort of weapon they can get their hands on before making a decision.
Another way to value with its russian peers now that the rouble has stablised:
Severstal: YTD -33%, PE 3
MMK: YTD -38% PE 2.15
NLMK: YTD -26% PE 2.6
AVG: -32%, PE 2.6
Using the average drop of 32% EVR would be worth 4.17
Using average PE of 2.6 EVR would be worth 4.3
Surprisingly close, so SP of 3 isn't unrealistic (this means a PE of 1.8). Really disappointed we can't trade it. Any LSE company that can substain a PE of less than 4 with minimal / manageable debt is a buy in my books.
Infinity, the vol gain from India will be offset by the vol loss from EU, Japan, Korea and Taiwan. Japan and Korea are major steel makers. India / China will be getting steep discounts for it as well.
Don't worry about my math mate, I just look at your prediction of $10b EBITDA in fy22 which works out to be about $8 of dividends a year, that alone is ludicrous.
Not interested in making this a back and forth thread, but I do hope your right.
Poly is facing cost pressure becuase of the sanctions, i would think evr is facing similar issues if not more (e.g. logistic cost, insurance cost) not to mention they be selling at a big discount to India / china becuase eu, Korea, japan, Taiwan not buying their coal / steel so any increase in volume from India / China will be offset by the loss in volume there. Also rasp will not have the capacity to produce an extra 20mt out of thin air but thats ok becuase I think they will struggle to sell more than what they sold last year anyways.
Having said that, becuase coking price is so strong rasp should still be making a profit but Def not 10b EBITDA and Def not more than their last year's financials imo.
Their steel business (in Russia) is likely not doing too well either having said that the SP is way undervalue and the rouble is back to pre war levels that we don't need to ramp for it to hit £2 imo :)
https://en.interfax.com.ua/news/general/826946.html
Ukrainian President Volodymyr Zelensky has confirmed the visit of Russian oligarch Roman Abramovich to Kyiv as a representative of the Russian negotiating team.
"As far as I know, and I know quite a bit, he is part of the Russian negotiating team. As far as I know, he was in Kyiv. I am not ready to discuss the format of his meeting," Zelensky said at a press conference in Kyiv on Saturday.
It's really unfortunate as if evr were able to trade it would probably be a £2ish stock at today's situation and probably £3-4 if war ends.
Looking at poly and pogs result it does give a sense evr would be operationally profitable but future qtrs it'll face increase in cost and decrease in sales price which is a double whammy (and probably lower production volume too). All in all it the SP would be much higher than the suspended share price.
Evraz and poly / pog might be facing similar political issues but they are fundamentally quite different.
Assuming same trend as POLY / POG then EVR would be priced at £1.5 + rasp add back. We can only hope that wars soon else.
Rasp as expected didn't report. Russian companies this week however looking abit more positive which is good news.
Rasp is a listed entity. Although majority own by evr they still have obligations, that's how I see anyways if they were listed on a proper exchange.
Not all rasp holders own evr so they would have right to know via announcement.
So russian steel companies not releasing results its because some people can trade and others can't, and evr not releasing it becuase no one can trade.
Evr reason is way weaker, as an investor we have the right to know (good or bad). This feels more like a co-ordinated effort organised by someone high up.
This is BS if you ask me. Lots of shareholders wanting to know if their investment is on fire or not. No one can trade the stock so not a good reason not to publish. They need to provide a better reason than this. I assume rasp won't either now.
Explains why moex is up. All in Ukraine's court now ...
https://www.ft.com/content/feddc32b-99e2-4af1-ab86-e65516710a3a
Russia has presented Ukraine with a draft document, outlining its demands as part of peace talks between the two sides, Kremlin spokesperson Dmitry Peskov has said.
“The ball is in their court,” Peskov said on Wednesday. “We are waiting for a response.”
Peskov said Moscow had presented Kyiv with a “clearly worded and thorough draft document” as part of negotiations after Russia’s invasion but signalled little progress at the moment. President Vladimir Putin said last week that talks were at a “dead end”.
The two sides announced an exchange of draft peace proposals in March during a meeting of Russian and Ukrainian delegations in Istanbul. Since then, talks have appeared to stall.
Meanwhile, Russia said it has lost trust in Ukraine’s negotiating team. Maria Zakharova, Russia’s foreign ministry spokesperson, said Ukraine had turned the talks into a “circus” and accused Kyiv of changing its position as a “distraction”.
“This isn’t ‘trust but verify’; this is just ‘verify’, because we haven’t trusted these people for a long time,” Zakharova said on Wednesday. “And of course, the main situation is developing on the ground.”
Talks over a potential ceasefire faltered this month when Kyiv accused Moscow of committing war crimes, including slaughtering hundreds of civilians and looting their homes, in towns Russia controlled before it withdrew its forces from central Ukraine.
Turkey’s foreign minister has also said progress has stalled over Ukraine’s calls for third-party states to sign up to collective security guarantees akin to Nato’s Article 5.
End of the day we all want evraz and rasp to prosper and trading halt lifted, we all in the same camp.
Moments like pog somewhat glad evr is suspended. I'm glad evr has already modelled a doomsday scenario and it seems we will survive without having to refinance if war drags, this to me is what's important right now (cash is king during situation like this no matter how good the fundamentals are).
I'm hoping I'm totally wrong on my estimate and that results are closer to your estimate infinity.
Infinity - while its a good sign with record profits from miners / steel producers, all these companies are NOT Russian companies. I hold BHP / RIO for years now and its making an absolute killing on resource prices.
None of the Russian steel companies have reported and I feel there is a reason for it, fair to say the non-Russian miners are making mega profits at Russia's expense unfortunately.
I hope your right infinity, even if we achieved 1/3 of your projections its good enough. You probably need to add in the substantial corporate overhead that's likely to come our way.
Rasp I have no doubt is going to be the crown jewel for evr this year.
@ Infinity: do you care share how you go to 2B EBITDA and 6-7B FY outlook? I do hope your right and I'm wrong but they look like pipe dream numbers as your stipulating we will beat last years results even during the war.
Some of the coal prices would likely be contracted (therefore a much lower price vs. spot) and I believe RASP would be sold at a discount because of current situation.
From the telegraph:
Putin has formally banned Russian firms from listing on foreign stock exchanges, marking a fresh blow to the country’s tycoons.
The Russian leader has signed off on legal amendments that require companies to delist their overseas shares, marking an end to a process that has gathered pace since the annexation of Crimea in 2014.
The new laws could force oligarchs such as Russia’s richest man Vladimir Potanin and steel billionaires Vladimir Lisin and Alexey Mordoshov to overhaul the ownership structure of their businesses.
The move also cements Russia’s status as a pariah from the global financial system even further. Foreign listings have slowed in recent years, while Russian companies have seen their shares crash in the wake of sanctions and boycotts.
Rasp imo is going to crush their Q1 results despite russian sanctions. In their fy21 report they have 0 net debt and probably going to generate some significant free cash flows so I won't be surprised if a dividend will be issued (which 91% goes to evr). I would like evr to buyout rest of rasp if possible and forget ever about demerging rasp.
EVR I envisaged Russia production steel vol will tank in outlook but they will divert their coking coal and iron ore to export markets to China / India instead. So essentially evr becoming more of a raw material business (much like Rio tinto, bhp) than a steel company while the war is on-going.