RE: Vanadium deliveries to US so far in 202124 Jan 2021 23:54
just a quick comment on costs and breakeven.
When the company comments on costs usd per MTV the numbers are invariably in the usd 17 to usd19 range, and this would be the additional cost of producing the next 10 tons of product, based on what it has cost to produce what has been produced already. This figure will reduce as production increases.
However, if you take the revenue figure for a period and divide it by tons produced, you will arrive at average sales per ton, and if this sales figure produces a small loss a small profit or breakeven zero, then that average sales price is on or very close to your breakeven revenue.
as an example the 6/2020 interims for 6 months gave sales 43.1m and 1765 tons sold which equates to 24.4 usd per ton sales. this produced an ebitda loss 1million usd so virtually breakeven at 24.4 usd.
there are many ways to dissect the numbers and of course there are always one offs that dont recur. you could argue that sales above 25 usd a ton would be profitable that would be true. you could argue that producing another 100,000 tons at 20usd makes sense because it covers all the production costs (17/19) and contributes 1usd or more to fixed cost coverage, that would be correct. you could argue that current prices achieved 27/30 usd puts it beyond doubt we are profitable, thats correct but we need new numbers to demonstrate it.
other income streams will eventually mean we become less reliant on vanadium tons sold, which is also a good thing, and is one of the reasons the company has invested in leasing, enerox, ies, vanadium chemicals etc
its all looking good
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