A strong showing in Q2/H1 2, but less momentum going forward

Tenaris released a very strong (albeit expected) set of results for Q2/H1 23. Margins and sales of this kind were last seen in 2006 (!). That said, the momentum is slowing down with the (expected) decrease in the US market. The group argues that a bottoming out will take place in H2. We see a potential weakness of the stock (on momentum) as an opportunity to step in for those who are ready to wait for a few months.

Q1 23: impressive, but hard to beat in the future though

Tenaris posted excellent (consensus-beating) results for Q1 23. This stemmed from still supportive prices (more or less flat on average) but most of all volumes (+16% sequentially despite the high comparison basis). Cash generation was also impressive in the quarter. The outlook calls for a degree of slowdown from this very high level (as expected) but this raises the question of momentum seen from the investors’ point of view. We will revise our forecasts a tick upwards.

Great year-end 22…and a positive outlook despite the high basis

Tenaris released a rather impressive set of results for FY22. The outlook is very supportive, with prices seen as “stabilising” at the current high level, while EMEA should grow in volume. The net cash position increased a tick despite a massive working capital build-up, comforting the group’s acquisition strategy. We will upgrade our numbers again.

Q3 22: a strong set of results

Q3 22 results were solid, mainly due to prices. The group’s EBITDA margin was above targets and reached 32%. The current energy crisis certainly supports investments in the group’s end-markets. The outlook of the group is supportive for Q4 22 and going into FY23. We will revise our forecasts upwards, at least for the current year, but most likely also going forward.

H1 22: solid results in a supportive context

The Q2 22 results were very solid. Both volumes and prices were well oriented. The outlook is supportive. Current high energy prices can only support this view. We will upgrade our numbers after this release, with a potential impact on the valuation.

A very sound set of results and an upgrade to come.

The Q1 22 results were very solid. Both volumes and prices were well oriented. The outlook is supportive. Current high energy prices can only support this view. We will upgrade our numbers and target price after this release.

A solid Q4 21 and a reasonably positive outlook

The FY21 numbers came in higher than expectations. The recovery in drilling activity and OCTG prices in North America explain this performance. The EBITDA margin is still on the rise despite higher input costs. The net result is also boosted by the contributions from Ternium and Usiminas (steel makers, not consolidated). Overall, a solid set of numbers and a reasonably positive outlook. We will revise our numbers and valuation upwards after our target price has been reached.

A solid Q3, despite anti-dumping concerns

Rather strong revenue and profit numbers for Q3 21, despite higher energy and freight costs. The cash consumption was high, mainly due to WC build-up. The DoC opened an investigation into imports from Argentina, Mexico and Russia, which could possibly weigh on Tenaris as it partly exports from South America to the US (on top of its US production). We will fine-tune our numbers and valuation. Our recommendation probably needs to turn positive again after our target price has been reached.

The H1 21 results are well on track with forecasts

H1 21 sales supported by North and South America The momentum is slowed by the Middle East and Africa, as expected The group’s margins (EBITDA) are improving and should reach 20% for the full year The cash position remains high despite a higher working capital We will fine-tune our forecasts on this decent set of results

Q1 21 OK and a positive outlook

The Q1 21 results came in broadly in line with expectations The outlook calls for a further recovery in sales and margins Higher prices should compensate for higher input costs We will fine-tune our forecasts on the back of this release

FY20 slightly better than expected, more to come for the current year

The FY20 results came in slightly above consensus Cost-cutting has done the job, waiting for the top line to gradually recover in FY21 The outlook is encouraging at the margin level and should positively impact margins going forward We will upgrade our forecasts and valuation after this release

Q3 20: rather weak but improving

Revenues in Q3 were weak as announced They still show a sequential improvement Cost-cutting is paying off, mitigating the fall in volumes and prices The trough could be behind with a reasonably optimistic outlook

A rather weak Q3 outlook

Q2 was weak as expected due to oil prices and the pandemic The outlook for Q3 is very cautious In particular, America remains a concern given the group’s geographic exposure We will revise downwards our forecasts for the current year at least

No drama, but momentum is not yet back

FY19 results were a bit lower than expected Q1 20 should be in the same vein as Q4 19, i.e. below FY20’s expected margin The integration of Ipsco (US) will provide some room for extra profits thanks to synergies FY20 should show a moderate growth in earnings We will revise our forecasts most likely with no big change in our target price

Q3 19: a bit weak; no growth recovery before 2020

The Q3 19 results were below our estimates due to lower US prices and weaker demand. Argentina was also subdued due to political uncertainty. Q4 is set to be in the same vein as Q3. The margin level remains decent, but will not recover before next year.

LIBERUM: Trident Royalties: Mexican standoff

Chariot Limited (AIM: CHAR): Imminent partner in Morocco

• The US$2.7 mm cash position at the end of June is in line with our expectations. • Although inflation across the industry and rig availability had complicated and delayed the finalization of a farm-in agreement for Anchois in Morocco, negotiations on partnering are in the final stages. A partner could be announced very soon. • Progress has been made across the portfolio. Onshore Morocco, permitting is under way with drilling now expected to start in early 2024 with up to four wells. Prospects

LIBERUM: Trident Royalties: Benefitting from rising rate environment

LIBERUM: Trident Royalties*: Utah lithium royalty acquisition

Interim Results

Diversified reported strong interim results, with production that was marginally below our estimate more than outweighed by tight cost control to deliver EBITDA ahead of our forecast; we broadly retain our FY23 estimates.

Savannah Energy+ (SAVE, Suspended, Under Review) - Interim results; readmission now expected in Q4

Pantheon Resources - Positive Outlook for Pantheon Resources

We believe that the outlook for Pantheon Resources is significantly improving.

Touchstone Exploration+ (TXP, House Stock at 68p) - Cascadura production update

Central Asia Metals: H1 2023 Interim Results

Central Asia Metals (CAML LN) results in H1 2023 follow a record prior comparable period, with the swing between the two primarily due to commodity price performance. H1 2023 net revenue of US$93.6m was down 18% YoY, EBITDA of US$48.9m was down 35% YoY. COGS was up 9.8% YoY given global inflationary pressures. Other charges on the P&L were minimal particularly now CAML is debt free. Owing to the timing of tax charges and some unfavourable working capital movements which we expect to be resolved

Touchstone Exploration+ (TXP, House Stock at 62p) - Cash generation and scale in Trinidad to the fore

Bushveld Minerals: H1 results; progress at Vanchem post period end

Bushveld Minerals (“BMN”) has released its results for H1 2023 having already released production of 1,784t at a weighted average cash cost of US$26.6/kgV, with H1 sales of 2,096tV through destocking during the period. Revenue for the period was US$78.4m, with adj EBITDA of US$10.3m and attributable NPAT of -US$14m. The company finished H1 with US$3.7m of cash and US$90.7m of debt. We expect H2 production of 1,992tV, split between 925tV from Vanchem and 1,067tV from Vametco, bringing full year p

LIBERUM: Shanta Gold: Solid beat at interims

Interim results

Bushveld delivered as robust a financial performance as could reasonably be expected in H1 2023 given the operational challenges faced. We are encouraged by the reported progress made at both Vametco and Vanchem since, and vanadium price aside (current prices are soft, and pose a downside risk if they do not recover in-line with our assumptions) we think Bushveld is broadly on course to meet our full-year estimates. But given its stressed balance sheet, concluding the refinancing of its c.US$45m

Chariot - Anchois Partnering in Final Stages

The partnering process at Anchois is now close to a conclusion, with farm-out negotiations in their final stages. The FEED phase of the Anchois gas development was completed in March, with Chariot continuing to make progress across all the Anchois technical and commercial workstreams. Post period, Chariot added the synergistic, low-cost, low-risk Loukos Onshore licence. Loukos Onshore contains several near-term drilling opportunities, which, if successful could lead to fast-tracked gas productio

Value anomaly despite resilient trading