Member Info for ragnarlothbrok

The RNS states decline to high single digit PBT margins. By my calcs, the previous consensus for 2024 sales was £80m and PBT £11.7m. On a margin of 9% this gives you PBT of £7.3m, a 38% decline versus expectations. This may be partly mitigated by higher sales but they state sales being higher than management, not market expectations

The RNS indicates a 35% reduction in 2024 profit and EPS despite revenue being a little better. The language of the RNS is quite deceptive. A more clear and perhaps cynical explanation would read:

"reduction in 2024 profit margin from 15% to 9% and profit from 11m to 7m. 2023 performance was inflated by bringing forward high value contracts from the following financial year. The fundamentals of the business are less certain given a high reliance on a small number of very high value projects which are not expected to continue next year but we hope will feature in 2025"

Toptiger could you point me in the direction of the Karo cash flow forecast? All I have been able to find is cash costs of $1,100/oz. At $2,100/oz the internal rate of return was 26%, I don't think there is much left from that based on current spot of below $1,600.

Between working capital build which typically takes place in year 1 and commissioning ramp up to full capacity its unlikely Karo will be contribute anything until 2026.

Please correct me if I'm wrong, I hope I am

Per ferroalloynet fell to 1.4mt from 1.67mt last week. Must be close to the lowest on record. How are prices not moving higher? Makes me wonder whatever happened to Vulcan, is it running? The numbers would suggest not. Chrome recovery expected closer to 80% by now yet its still in the 60s. Was the plant a failure? Management been quiet on this one for several quarters, not seeing the results in production or cost improvements. Run rate still 1.7Mt compared to 2.0Mt when Vulcan expected up and running. Not much advantage of an open pit versus underground when the pit keeps filling with water. $100m in chrome revenue gone missing....

Strangely delayed announcement considering their chair died nearly a month ago!

Don't know about double or triple the SP but cash generation and that balance is impressive!
31/12/21 - $218m
31/3/22 - $253m

June qtr would have been immense, must have close to $300m on a Mcap of $431m. With $30m/qtr the company will have cash higher than Mcap by end of 2023

Looks like some institutional sells, well below midpoint. What a terrible price that was.
They are dropping shares all over the market in anticipation of the recession. Not many holders in it for short term gains any more, only the committed are left

Management have never seemed too bothered by the share price, they have seen it slide over 95%.

I don't normally bother trying to guess what all these little trades are. What I do know is that we are not in an orderly market, there are almost no buyers out there and prices are tanking all over the place.

At 13p £90m Mcap is less than net debt, normally indicating a business in distress but HSS has never been in better health with net debt approaching zero in the next 2 years so should be well placed to ride out the impending troubles

Sub £100m Mcap on EBITDA of over £70m and cash flow of £35m, business never been in better shape but sentiment so poor the share price isn’t far from record lows now. The cyclical stocks are indicating the bottom is going to fall out. Speedy and the others in construction aren’t faring any better

If I remember those sells yesterday were at around 15p and now I can sell 10k at over 16k for the first time in a month. Seems that something happened in the book.

They will be absolutely raking it in now, not sure about the rest of GB but construction activity around London is frenetic. Speedy trading update a couple of weeks ago saw revenue up YoY 8% in April/May, HSS up 13% in Jan-Mar. How long this lasts is the question.

Target recovery is now 80%

Reasonably active twitter feed of late, there is some kind of procurement news landing tomorrow. Not sure if it will be market sensitive

https://twitter.com/cloudcocoPlc

If the target recovery is still 82% it was operating at nowhere near capacity for the bulk of the half and only approached 65% at the very end of Q2. I would say it was even less than 31% for the quarter looking at production levels. First production was only in Q2. They have confirmed guidance as recently as mid-May (with only 3.5 months to go) so they must be confident on grades and Vulcan so I have nervously adopted the low end in my expectations

I'm not a fan of Karo just yet, need to see the FS and get an idea of costs (without having to travel to Cyprus to read the fairness report) and how one operates in a hyperinflationary environment. Then again I'm not really a fan of any greenfield project as I have been swept up by the wave of shareholder returns and sweating existing assets. But perhaps it is foresightful of management to be investing in this environment where companies seem very nervous to commit to major projects, which will no doubt have price implication 3-5 years down the road

Food is also a delicate subject at the moment. Paying out large dividends when people are struggling to feed themselves is not a good strategy

Hi Mike, next year price hard to predict indeed but no better estimate than spot prices in my view. If chrome guidance is hit at the low end of 1.75mt then that leaves 970mt in H2, 25% higher than H1. Are we going to hit bottom end of guidance of chrome for the full year? Seems like there is a risk we don't with the delays to Vulcan. I'm really looking forward to Vulcan at full production, surely we will see something in costs from this? One everything is at full steam there is a path to 2mtpa chrome. And with prices where there are H2 should be a record on every line though there is a long way to go to September

I watched the investor meet yesterday, one thing which they didn't seem keen to discuss was this $2.5m in capitalised development costs. Does anyone have any info on what this is expected to be for this year?

Don't know if any saw the discussion around the stripping ratio yesterday. For years now they have been telling us that the ratio would be around 8 LOM but we have never gone below 10 in the last few years. Now the LOM has been pushed to 11 or 12 (cant remember exact number) reflecting the increase in the open pit life. So costs incurred for an additional >20% stripping ratio in the short term for additional open pit revenue 10 years from now. Seems pretty suspicious to me

It looks like the broker reports are all forecasting a reduction in prices in the near term. EBITDA for 2022 is $263m but for 2023 is only $280m. I would guess there will be an uplift in production for 2023, at least incorporating the full year from Vulcan. If you use the current spot for 2023 you get over $350m EBITDA for the year.

Chrome is key now with close to 60% of revenue at current spot. Keep a close eye on those Chinese port stocks. They are currently around 2.5mt when for the last 2 years it mostly ranged around 3.5mt and as high as 4mt. It does remind me alot of the rhodium boom where it took a long time for the SP to react to the higher price

I noticed that the price fell yesterday in the first 30 minutes due to what appears to be one large seller. I wonder how that seller decided to get out with only 1 hour to read and then react to what are fairly detailed results. Talk about a weak holder who is looking backwards rather than forwards

To be fair to Anthony, they have so much on their plate I think he does a pretty good job with selling the story. ATM have done a lot of investor days and Anthony is active on the interview front, investormeet and Twitter. When you think about all the feasibility studies and exploration they are doing this year, plus the tin expansion I imagine they are all just getting on with it

Sorry 34 yes my comment about Indonesia one of the most corrupt was a wild exaggeration. There are many Asian companies like Thailand which are below Indonesia. What I should have said was that Indonesia has a long history of troubles with corruption, particularly under the Suharto regime

There has been a lot of M&A in the lithium space recently. And its getting closer to Namibia with some serious Chinese money making its way to Africa and looking like they are trying to corner the market. You have the battle for Manono in the Congo and this recent acquisition of a Zimbabwean project
https://www.mining.com/web/huayou-cobalt-to-invest-300m-in-zimbabwe-lithium-mine/
ATM is going to need some serious capital over the next 12-24 months, I wonder when and where it will come from...

https://www.mining.com/web/chinese-australian-investors-battle-for-largest-lithium-deposit/