focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
I concur, the Russian advance is heavy and brutal, but too disorganised. Russian soldiers often travel without armoured support, exposed, easy targets for Ukrainian artillery, drones and snipers. When they do use tanks and armoured personnel vehicles, they cluster together, making themselves perfect targets for Ukrainian grenadiers with Javelins and NLAWS.
Agree BB, RHM is a beast. Plus, there is a lot of rumours about them and Thyssen-Krupp teaming up in some capacity. Thyssen-Krupp is another arms company that people should keep an eye out for. Its been a bit volatile past few months but is currently still way undervalued. If Rheinmentall do form a arms consortium of sorts, then definitely expect Thyssen-Krupp to be involved. Those shells won't make themselves.
No worries H, I really do think it is. I am more concerned at how things on the battle might turn out. The Russians are currently assaulting Chasiv Yar – occupying it would give the Russians easy access to the major towns in Donetsk Oblast. Vadym Skibitskyi, Deputy Head of Defence Intelligence of Ukraine, recently said in an Economist interview that defending Chasiv Yar is proving to be hard. The Russians are throwing everything at the Ukrainians – Su-34 bombers, Su-25 attack jets, FAB-500 glide bombs, loitering munitions like the HESA Shahed 136 and the ZALA Lancet drone, Storm Z and Storm V penal units in so-called 'meat waves', ODAB-1500 thermobaric bombs, paratroopers from the elite 331st Guards Airborne Regiment, incendiary munitions like white phosphorous, armoured convoys of AFV's like the BMD-2 and BMP-2 and APC's like the BTR-80 APC, plus lots of T-72 tanks. The Ukrainians are doing a stellar job holding them off so far, but they are desperately short of men and munitions.
Howardzzz – Ferrexpo has recorded a provision of $131 million in the chance they do lose the court case. This will be more than to cover any negative outcome from the two legal cases. Ferrexpo would have recorded a profit of $46 million this year, if not for this. Hence, they reported a loss of $85 million instead.
I will leave you with some financial highlights from their report:
• Revenue 48% lower at US$652 million due to lower realisable sales resulting from logistics constraints and a decrease in average iron ore prices (2022: US$1.2 billion).
• Underlying EBITDAA fell to US$130 million at an EBITDA margin of 20%, heavily influenced by operating foreign exchange gains of only US$31 million for 2023 compared to US$339 million in 2022.
• Net cash flows from operations: remain positive at US$101 million despite the significant challenges posed by the war (2022: US$301 million).
• US$131 million effect from provisions to cover possible negative outcome of ongoing legal proceedings results in a loss of US$85 million.
• Capital investment of US$101 million, including sustaining and optimisation projects (2022: US$161 million).
• Net cash position: improved marginally to US$108 million as at 31 December 2023 (2022: US$106 million
“You could wake up to an rns saying the plant has been destroyed”
Russia would prefer to appropriate the mines themselves. There is no “plant.” If they do attack, it might cost them too much in terms of material and manpower. Mines are too disparate in terms of targets. Much of the infrastructure is underground. Remember Avdiivka? More Russians died taking Metinvest’s Coke and Chemical Plant than during the
entirety of the ten-year Soviet–Afghan War. A true Pyrric victory.
“You could wake up to an rns saying they have lost their court cases and need to find cash they don’t have”
I am confident they will prevail in the courts.
In terms of cash, they have plenty. Read the annual report, cash is not something they have a lack of.
Personally, I am buying as much as I can OHM. I understand those who feel tentative or anxious. But the court case really isn't anything that Ferrexpo can't handle. In April 2024, Ukraine exported more than 13 million tons of products, surpassing the indicators of February 2022, and thus reaching pre-war volumes once more. These exports were significant: worth $3.3 billion and 1.3 million tons more than in March 2024. The volume was more than Ukraine exported in February 2022.
The growth of exports is helped by:
1) Opening of an alternative sea corridor in the summer of 2023, which allows Ukraine to export, among other things, grain and metal.
2) Ship insurance program, created jointly with the British government and a pool of insurance companies such as Lloyds of London and Marsh. Every voyage is issued $50 million of hull war risk cover and $50 million of protection and indemnity (P&I) insurance.
3) Expansion of the capacity of Solidarity Lines, primarily with Moldova and Romania.
4) Improvement of conditions for transporting goods by rail to the Danube ports.
Okay, there's a lot to break down.
1) The hearing scheduled for yesterday (30th April), may not have happened.
2) A preparatory court hearing scheduled for 12th March 2024 did not take place nor did one scheduled for 9th April 2024.
3) A court of appeal hearing scheduled for 16 April 2024 did not take place, but one is for now scheduled for 14th May.
4) The Supreme Court hearing on 17 April 2024 considered primarily procedural matters, and heard the arguments of both parties. The next Supreme Court hearing is scheduled for 27 May 2024.
5) AGM is 23rd May.
Information like this makes me even more bullish on FXPO. Nice find Alex. I reckon the SP will flutter around the mid 50s before the next court hearing scheduled for 27 May 2024.
Government published this detailing the extensive aid and military investment of the UK.
"Building on the historic UK-Ukraine Security Agreement, marking the start of a 100-year alliance, we are committing
to provide at least the current level of support to Ukraine until the end of the decade or for as long as required."
https://assets.publishing.service.gov.uk/media/6628c835b0ace32985a7e51c/2024-04-23_Defending_Britain_-_FINAL.pdf
OMH and Evanescent, you read my mind. JW, the upcoming court cases are small fry. The price at the moment is a great opportunity to get some cheap shares easily worth 3 to 10 X more. Large share holders should not be selling at all. Apart from losing money, they will be missing out big time on massive future growth. Are you shorting FXPO though JW? If so – why? It is about as much good sense as parachuting into an alligator farm.
Wouldn't worry about court case too much. It is (mostly) theatrics to show they are clamping down on corruption. It would be extremely foolish to punish FXPO when it has many big, influential foreign investors like HSBC and Blackrock. I've said it before, and I'll say it again, this is the steal of the century, when the court case is done and dusted, there will most certainly be a dividend (likely a resumption of the one cancelled back in February), but perhaps a 2nd dividend some time later. A 3rd would not be out of the question considering the sheer amount of cash generated by FXPO. The Black Sea is clear for exports now. The SP will NOT fall back to record lows ever again (unless the company is absorbed by the Russians – highly improbable) as all the risk is now baked into the price. With the recent passing of the aid bill, and security assurances from NATO, I wouldn't worry about that. If Ukraine wins, this becomes a multibagger overnight, and the SP might even hit record highs (why not?) FXPO will be involved in the reconstruction of Ukraine.
Thyssen-Krupp is steadily doing well, restructuring plan with Carlyle Group and diverse exposure (submarines and corvettes to Israelis), is buffeting them. Advise anyone who isn't in Thyssen-Krupp to invest, I invested about 3 weeks ago and am up 10%. Stock is still dirt cheap – slightly more than RR now a share, but could easily double or even triple.
Clued, again, its a warzone. Its not an excuse, its a reason. If you think the Israelis are being callous, you should see what the Azerbaijanis are doing, or the junta in Burma. Literally nobody cares. Its all just hand-wringing from certain sections of society who have an axe to a grind. Its just distracting from the Palestinians. There's a reason why Egypt and Lebanon are refusing to open their borders to refugees from Palestine – they remember the trouble it caused the last time they accepted them. Beirut used to be the Paris of the Middle East before the PLO turned up. Cairo refuses to host anybody with links to Hamas – they are the offshoot of the Muslim Brotherhood (Egypt is sworn enemies with them).
Yes, the Israelis are hard, abrasive, arrogant, but their neighbours are much, much worse.
"Complicit" "Collective punishment" ? It's a highly congested warzone. Innocents die. Israel shouldn't be held to a higher standard than any other country. If Saudi Arabia got even a tenth of the flak Israel does, there would be questions. The moaning is all done in bad faith. There's many crosses to bear. Senseless to pick this one.
Wet blankets in judiciary, politics and society believe UK arms sales to Israel breaches international laws. Usual selection of Islamists, virtue-signallers, student activists, ambulance chasers. Should organise a first-class ticket to Rafah instead.
100 billion fund being proposed by NATO will give the industry a adrenaline shot. Expect BAE, Rolls-Royce, Airbus, Thales, Dassault, Leonardo, Rheinmetall to benefit especially.
Mulder, it's war. What do you expect? People die. Everybody understands the situation is messy, but your take is naive, short-sighted and cynical. BAE are a premier arms manufacturer absolutely essential to our security and defence. Without them, we would be a lot poorer (not just economically), but weaker too, less influential on the global stage, less powerful. The UK needs to be as strong as possible in today's volatile world.
Dividend could quite easily be resumed if news is good – recent performance of company has been/is remarkable regardless of the circumstances (output has been highest since outbreak of the war). If SP goes lower it goes lower. But this is the steal of the century, quite simply.
Still going strong. I am picking up as much as possible.
https://inventure.com.ua/en/news/ukraine/ferrexpo-invested-dollar80-million-in-the-ferrexpo-poltava-mining-fpm-production-line
Hold, unless you need the money. Otherwise, wait and watch – this will double within 4 years.