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Even using the price used without the 2 price rises it gives us a profit figure at 200kt of £3.7m… I can understand peoples frustrations but im sure there’s a reason for doing it, I assume something to do with not letting competitors know their pricing.
Either way you crunch the numbers we have a very profitable year ahead with growth only just beginning.
We know they were selling at 200 reals last year and year before. Since then Brian’s stated that we’ve had 2 price rises. This is the guessing bit. To me it seams reasonable to suggest a 20-25% increase in sales price given wider fertilizer prices. If In doubt and want to be super cautious with figures use 200 reals!
Tend to agree whl2. If I had to guess I would say it’s Mr Burton controlling the twitter and coming up with past quotes etc. I’ve sent the company an email to try and clarify a little more when it was supposedly said. I’m not too bothered though, I focus on the past 3 or 4 interviews Brian has done and his message is pretty clear. All things line up to us hitting at least 200kt this year and then 350+ 2023.
Next year if 350kt achieved circa £9m profit- reasonable to think £4-5m dividend achievable or 2.5p dividend… futures bright! IMO. DYOR
Think 7 aud is too low for opex, I’d say 10/11 aud is more reasonable. It’s an old statement but I’m basing it off mark heyhoes crux comments 2 years ago abiut 7.50 usd opex per tonne as we reach near capacity. 70 aud sales price gives 60 aud margins.
I predict a £4.5-£5m profit number this year if we can sell 200k tonnes which I think is a given considering our start to the year, fertilizer mapa registration and macro events. £4.5m profit on a £29m mcap… with over 100% sales growth yr on yr, with a new project coming online next year, with a very realistic possibility of 350kt achieved next year and potentially more… giving a £10m profit next year with dividends for 100 years. Peers valued at 17 pe… Really what’s not to like??
Canetoad- prices last year were around 200 Brazilian reals- or roughly 55 aud per tonne.
Since then management have stated we’ve had 2 price rises- it’s all guesswork as they don’t disclose their selling price this year for commercial reasons however a 25% price rise I would think would be realistic considering the macro events affecting fertilisers. 250 real = 70 aud per tonne.
I personally can’t see a placing. End of june 2021 we had 1.6usd in cash. And 1.15usd in receivables. If we look at what’s happened since June 2021, we sold 46,000 tonnes in q3 2021 and then 23,000 tonnes in q4 2021. That’s basically 3/4 of last years total sales came in the period after June 2021 when we know we had 1.6usd and 1.15usd in receivables. We got a loan for the solar panels so didn’t have to touch the cash pile for that.
Looking forward to this year we know we’ve sold 70,000 tonnes In the first 3 months. So over the last 9 months 139,000 tonnes sold. If anything I would expect the cash pile to be bigger than the 1.6m usd - with 139,000 sales added in the 9 months since and at least some of the receivables added in. Add this to the agreement with banco do Brazil which allows customers to access credit to pay for kp fertil and with Brian repeatedly stating on recent podcasts no placing required… “if anything we’d be looking to return cash to shareholders” I think a placing is most unlikely IMO
Gshivers I think we will do more than 200k. Board seem to me to have taken a stance in the last 12 months or so of under promising and over delivering.
The 150kt tonnes target was in my opinion the minimum they thought they would achieve this year. This was before 2 huge game changers again in my opinion :
1. The unfortunate macro events, which has limited supply of fertilisers greatly and made countries wake up to domestic production, especially Brazil, and the recent articles which have come out from Brazil back this up.
2. The registration of kp fertil as a fertiliser. Brian stated certain farmers wouldn’t buy kp fertil before as it wasn’t registered by mapa as a fertilizer. This is no longer the case so can effectively sell to everyone who has a need for kp fertil.
These game changers combined with the 70,000 tonnes already hit for the year and Brian stating “ Our customers are continuing to see outstanding results from the use of our product and feedback from them remains extremely positive and encouraging” fills me with extreme confidence in our future. So yes I would say we will achieve over 200kt personally.
Correct swingy. If you look at the daily chart, we have gone vertical. I’m yet to see a chart that hasn’t retraced somewhat after a daily chart vertical move, not Bitcoin, not Tesla when everyone couldn’t get enough of it. It’s how the market works, sellers take some profits and the price retraces down to a level where new buyers see great value and up we go again. This is completely normal. I can see the next month or so us retracing to 13/14p when buyers will see great value and we will continue our next leg higher. If you can’t stomach that then your not investing your trading, which is fine, just wont be where the big gains will be found. On the flip side news we aren’t expecting such as significant orders or increased yearly sales targets etc could kick start us again sharply. Very very excited for the future, think longer term! The rewards could/should be exceptional. ATB
Below is a q&a response from 2018. So 1 million dollars and 3/4 months to install another processing line!
Question.
Is the 320Kt pa current plant capacity based on 8, 12 or 24hr production and can it be scaled up by simply increasing man hours or is its storage/ plant the limiting factor?
Answer.
The 320Ktpa production capacity figure is based on three x 7.5-hour shifts, 5.5 days a week for 50 weeks a year. That schedule includes 1.5 days per week for routine maintenance and is a commonly accepted industry shift rotation for an operation as simple as ours. As we have said previously, to scale up production further, we will need to install another processing line which is a relatively straight forward process that should cost ~US$1m and take circa 3-4 months to fabricate and install. There are no limiting factors to expand capacity.
We grew sales from 50kt -85kt = 70% increase.
85kt-150kt original target for this year 76% increase.
85kt-200kt this year probable new target = 135%
As sales grow and word spreads we should continue to see this growth IMO! Potential 3 million tonnes of demand for our product JUST FOR COFFEE within 300km, and 3x that for sugarcane! Markets simply huge.
I really don’t think it’s pie in the sky numbers to suggest 400kt could be hit within next 18/24 months. Verde are proof of growth once farmers see the product for themselves and change their old ways and see newer better techniques for their crops.
Brian states “we have the right commodity in the. right place at right time” let’s not underestimate this. Also especially pleased with his comment about how happy the farmers are with the product “ Our customers are continuing to see outstanding results from the use of our product and feedback from them remains extremely positive and encouraging”
The futures incredibly bright!
All in my opinion, please DYOR
Swingy, if they did need to expand right now and needed money could they get a loan from banco do Brazil like they did for solar panels? For clarity I think we have enough cash in the bank anyway but I don’t see why a small loan wouldn’t suffice if we didn’t want to eat into cash pile. Especially with the huge government focus shifting to local production of fertiliser. No doubt profits end of the year will be around the £4m + minimum. I remember mark heyhoe mentioning for an extra 320kt tonnes capacity of the mine taking us to 640kt would be 1 million dollars. Very cheap in the bigger scheme of things. Can’t see dilution, organic growth, 100 year mine, new mines coming on stream 2023, happy farmers!!
Couldn’t be happier, the business is taking off. “Our customers are continuing to see outstanding results from the use of our product and feedback from them remains extremely positive and encouraging” I really don’t think we could be better positioned. Excellent rns.
Yes chique this is the most exciting thing for me! As we know once farmers try the product and see for themselves the effects on the soil and crops it has, virtually all of them stay with kp fertil and come back and buy more next year. This shouldn’t just be a gap fill for this year with the farmers buying and then going back to previous techniques instead a long lasting effect. This is unfortunately due to awful events in Ukraine a perfect storm for the product and we are able to get widespread visibility in the market and attract potential buyers that would have taken us years to get through to. Can’t wait for the update. ATB
Agree whl2, I was looking through verdes announcement today. Verdes profit does jump drastically FY22 in their guidance of £16m this year in profit selling 700,000 tonnes. Using chiques calculator selling 200kt and using a 25% increase in the old 200 real selling price gives a profit number of roughly £4.5m which ties in to the comments Brian made about generating a third of our mcap in profits back when we were sitting at £10m mcap before the macro events and previous 2 rns. If we use verdes fy22 they are trading at 17x profit. If we added a 17x profit to our £4.5 = £76mcap or 40p a share. Possible we sell more than 200kt this year in my opinion given most recent 2 announcements. And also other projects and continued growth for years to come I would imagine. All bodes well for a very bright future imo!
Verde agritech q1 sales guidance was 115,000 at the start of the year. Will be very interesting to compare q1 results from ours to theirs and see if we can extrapolate how much accounts to farmers making their purchasing decisions earlier in the year in general in Brazil and how much is due to farmers recognising kp fertil a ability to enhance their crops and soil.
As of the start of the year Brian said we have a couple million aud dollars in the bank. He said categorically no placing if anything would look to return money to shareholders.
Too add extra 300kt of capacity = 1 million usd. The only way I could see a placing happen is if sales really did rocket and we needed to add that capacity asap! I think we would have the cash to do it ourselves, if not a potential loan with banco do Brazil, or a minimal chance of placing. In any case if that was the case and you couldn’t see that as an extreme positive ramping up production another 300,000 tonnes then you really shouldn’t be investing. To be clear I don’t think a placing is needed or will happen, just trying to give some balanced views and yes I am one of the most bullish people you’ll find on this stock short/ medium and especially long term. ATB. Please DYOR