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Likewise Moneyman thanks for your numbers. Reassuring that you have a similar number.
For "speciality" chrome the 75.4k that you mention for Oct 2022 to March 2023 is somewhat of an outlier. For Oct 2021 to March 2022 it was 176.4k, for April to Sept 2022 173.1k and for April -Sept 2023 147.8k. So for Oct 2023 to March 2024
I am expecting 160k. Speciality chrome sells for a $30 to 40/tonne premium compared to metallurgical chrome so an extra 10,000 tonnes of speciality chrome rather than metallurgical chrome would increase turnover by $300,000 to 400,000.
Moneyman, I agree and we will find out on 23rd May.
1. I am expecting H1 turnover of $342m (PGM 78/chrome 239/agency 23/manufacturing 1.7). I am expecting those "speciality " chrome grades to be steady.
2. We already know that in H1 the Company milled 709,300 tonnes more than mined (over 25% of the milled total) which assuming no stock adjustments is roughly the "bought in" materials for processing that you mention (this is included in the "cost of commodities" in the overall Cost of Sales), likewise in H2/2023 the same number was 544,600 tonnes. So the H1 Cost of Sales will include the cost of this bought in material. I am assuming total costs of $286m (Cost of Sales $257m , other operating expenses $29m, other net costs zero) .This gives PBT $56m, total PAT $43m , PAT attributable to shareholders $41m.EPS 13.6 cents, HI dividend 2.25 to 2.5c. It would be good to know what others expect!
3. Karo capex should be steady until the ring fenced financing is in place which will probably delay the project another year into 2026.
Good point rylidan. Also you should take into account the cumulative trades on both TMIP and TMI (and not just TMIP).
The other factors to take into account is that with a decent spread the market maker can afford to only adjust the ask and bid a few times a day rather than after a certain volume of trades and with the ex divi date on 9th May we should expect a bit of a price increase and then a 2c or 1.6p drop thereafter.
Beza, likewise I have nor seen any. The EPS is highly variable and subject to many factors but to give you a direct answer for the FY April 2024-March 2025 if the Time Charter Equivalent was to remain at $13,132/day (the figure at the end of March) for the full year and all other variables , particularly vessel values remained unchanged then I would expect PAT of around $24m or EPS of around 7 cents/share.
But given the capital intensive nature of the shipping industry and particularly since ship values can quickly go up or down the conventional wisdom is that the best valuation metric for shipping companies is Net Added Value (NAV) rather than EPS or PAT. A possible alternative is discounted cashflow but this is not easy to calculate for us mere mortals and still has assumptions.
To put this into perspective, in 2021 TMI had a PAT of $252.8 m which included a gain on assets (effectively vessel values) of $245.6m so PAT before asset adjustment $7.2m. In 2022 PAT $26.2m including a loss on financial assets of -$6.4m so PAT before asset adjustment $32.6m. H1 2023 PAT -$120.2m including loss on asset values -$130.7m so PAT before asset adjustment +$10.5, for H2 (oct 2023 to March 2024) I am expecting PAT $83 m including asset gain of $72m so PAT before asset adjustment +$11m. So you can see this asset adjustment or change in ship values is a massive number and leads to massive profit swings in the business.
The shipping industry can be incredibly cyclical, this roller coaster is not for everyone. The good news is that TMI shares are trading at a 33% discount to Net Asset Value , if the shipping industry improves that discount would be expected to reduce giving a potential increase in the share price. Things could go the other way. As Sam explains below the specifics on TMI are promising. But as I have said below, TMI might be in the top quartile of shipping companies but ultimately cannot buck the market.
......plus on TMI , which is the same share but just in USD rather than GBP $119k bought and $24k sold.
After some deep thought the profit for the quarter was still lower than the dividend payment so we are still relying on vessel appreciation rather than the the usual vessel depreciation or vessel sales so we need to break this trend, but the numbers are slowly moving upwards.
Sam, I agree.
On your comment that the debt to asset ration has slightly increased this is largely due to the delivery of the new build Handysize in Feb to Grindrod costing $33.5m which pretty much offsets the money coming in from selling the older vessels. Interesting that Grindrod sold one Ultramax but with the option to repurchase back at a later stage.
Hi Sam, yes very good set of numbers. The NAV increase of 12c/share was above my expectation of 9-10c and the profit for the period of $0.01/share or about $3.3m, although still a relatively small number, was above my expectation of a slight loss to breakeven so they have done well in the charter rates.. The current share price of around 79p (99c) still represents a 33% discount to that NAV of 148c so it has marginally come in.
I agree the focus on reducing debt even further is great although it is at the expense on reducing the fleet number (generally selling the older/smaller vessels) which we cannot keep doing but I trust the management on this.
Hi Sam, thanks for the information.
I expect us to be profitable with the vessel appreciation but slightly loss making or break even without the vessel gain. Still a big step in the right direction.
Yes we have always beatthe indexes but the end of Q1/24 index was lower than the end of Q1 but as you say, fingers crossed.
I expect a close vote and we will probably just make it, again fingers crossed.
I am still expecting the NAV to be at an improved level to shaprodpri
.....So what is happening next week on the 25th? Is that the date of the extraordinary AGM for the Grindrod minority shareholders? Seems to be too early for me. The buy-out still might not go through as minimum 75% of the minority shareholders have to vote in favour. Or do you mean fri 26th when the quarterly TMI NAV and trading update are out?
the share price has had a good recovery in the first 3 months of the year and as reported by a few of you has had a few weird gyrations. At the moment it seems to be in a holding pattern waiting for the NAV news next week. I am less gung-ho than most of you and expect the operating performance still to be loss making but a good increase in vessel values to give a healthy increase in the NAV and provide a good platform for further improvement in this quarter.. BHSI is now advancing again.
On a different note, Pacific Basin has just announced a share buy back of up to $40m by the end of the year and all share bought will be cancelled rather than being held by the company. Sadly at TMI we are probably not cash rich enough to do this at the moment.
Hi Manyaana, I have mentioned Salene before but no information was forthcoming and in the current lull Ilja is not allowed to comment until the H1 accounts are out on 24/05. As you say, the Zim government introduced an export ban to encourage the added value to stay in the country but it probably just allows the domestic ferrochrome producers to buy at lower prices if they do not have to compete with the Chinese export market (intriguingly there is a small amount of Zim chrome concentrates sold in China so I am not sure how it gets out). There was discussion of a similar export ban in S Africa but they have gone in a different direction.
If I remember rightly, Salene was a relatively small scale operation based on 80,000 tonnes/year high grade chrome concentrates with a relatively small LOM of 7-10 year, but 80,000 tonnes at say $400/tonne would give a revenue of $32m/year which would probably generate a profit after tax of say $8m/year. Instead it is currently mothballed but still held in the Tharisa accounts for a rainy day. In their analysis 2 days ago, Tamesis gave Salene a risked value of $48m.
Likewise I would like to hear more on the smaller open pit possibly starting to transition to an underground mine as early as 2025 or 2026 and what this will do to overall chrome production and costs at Tharisa over the next 3 to 8 years.
Reef milled and PGM production were marginally up on my expectation which are all the better given that the stripping ratio deteriorated to 14.0m3:3m . The chrome number is a little disappointing but I take the comment from Ilja at face value if Vulcan has been down for maintenance/repair and I see the Cr2o3 ROM grade this quarter is only 18.1% compared to 19.1% the previous quarter which is 5.2% lower which just reflects the grade we are digging out of the ground this quarter just happens to have a lower chrome content plus we are still having to buy- in about 25% of the ROM we are milling and I suppose that is variable depending on where you buy it in from. The Company has said that it aims to stop having to buy-in ROM by the end of this year which suggests reef mined should get back to the levels of 18-24 months ago. As Stemis has mentioned below, the Company is still on target to achieve the guidance numbers for the FY. So just a minor blip.
Yes, the cash is lower than expected but let us wait for the full H1 numbers to see where it has gone.
I assume there was no weekly chrome price yesterday as China had a public holiday last Friday?
Jan-March production numbers out tomorrow ,I am expecting 1.37m tonnes ROM milled (the average of the last 2 Jan-March quarters) which should generate PPGM's about 34,500 oz and chrome 434,000 tonnes. Hopefully ROM milled shows signs of improving and net cash is holding up.
Sam I totally agree. If it goes ahead TMIP will own all of Grindrod. I am not sure if it automatically means a delisting? But that might be next.
At USD 14.25 for each Grindrod share that is 35% premium to the closing share price yesterday of USD 10.54 and probably a 5 to 10% premium to NAV.
Sam is right, the Quarterly NAV and trading update is out on 26th April. Although I am expecting an operational loss , I calculate that vessel values have actually increased by over $23 m giving a Quarterly increase in NAV of 9 to 10 cents share so that the current share price is trading at a 28% discount to NAV and good enough to protect the dividend. So to answer Rylidan's comment I think the share price is at the right value at the moment.
Grindrod took delivery of the brand new Handysize vessel in late Feb so it will be interesting to see how that is performing.
Although the BHSI has traded down in the last 7 sessions, yesterday according to Hellenic Shipping , 10 year old Handysize values were up a massive 3.3% in a week. The full Year accounts to 31st March 2024 are out on 19th July.
GLA
Sotolo, to be fair the current share price is still up 5.45% since the share buyback was announced. And as Pedobull mentions below, a total buyback of $5m is currently just 2.3% of the total share value. Peel Hunt have until 21st Feb 2025 to complete this so if they spread it out over April 24-Feb 25 (11 months) then it is $455,000/month.
But overall fantastic news and a clear signal by the Company.
Interesting that the CFO below mentions "capital discipline" a couple of times so we are not going to have the minimum 15% NPAT dividend policy change dramatically and he mentions we are still working on the "necessary third-party financing" for the first phase of Karo.
Today is the last working day of HI so the final part of the PGM Fair Value calculation will be based on todays PGM basket. Fingers crossed for a good Q2 production report in April!