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The group released a solid set of results for Q1 22 It is maintaining the guidance issued in April We still believe that the current macro context could hurt We will fine-tune our numbers, with no major impact on our target price at first sight
Companies: Salzgitter AG
AlphaValue
As expected (and communicated in the preliminary results), the FY21 results were very sound. The group benefited from high volumes and sky-rocketing prices. The guidance is supportive, even if it does not integrate the latest geopolitical developments. We are therefore a bit sceptical that the group can achieve its (unchanged) targets for the current year.
The group presented its strategy to reach its 2030 environmental targets. Altogether, it looked like a marketing exercise and we ended up a little bit frustrated by the lack of financial targets, among others. Our numbers will not change after this event.
The Q3 21 came as no surprise after the release of preliminaries in late October. They showed a still strong profitability on the back of firm prices. The market was probably surprised that the guidance was not revised upwards. It may also have to wait for the new CEO to present his strategy in early 2022. We will revise our numbers and valuation upwards on the back of this release.
The H1 21 numbers came in roughly in line with the street’s expectations The results were driven by the Strip Steel and Trading business units as well as the strong contribution from Aurubis The net financial position is stable despite the pick-up in activities The value of the CO2 allowances procured by the EU greenhouse gas emission trading scheme starting in 2021 amounts to almost €1bn The new strategy is to be presented by the incumbent CEO in spring 2022
Q1 21 results (already partly released on 25 April) came in above consensus Almost all segments did well on higher volumes and prices The group substantially raised its full-year guidance The contribution of Aurubis was also substantial We will adjust our numbers and target price
FY20 in line with preliminary results The operating cash flow has turned positive in Q4 No dividend to be paid for FY20 The group’s forecasts may look conservative The group insists on its green initiatives We will revise upwards our cautious forecasts
Salzgitter’s management excuses the company’s very poor profitability with special effects. This was the case in the past and is again used as an excuse for the sizeable 2019 loss. Although the virus has changed the overall picture for the steel industry, management expects this year’s revenue to increase by more than 5% to €9bn and break-even pre-tax earnings.
Salzgitter has released regular profit warnings during the course of 2019. It now uses the current weak environment to write off another €200m of the group’s assets. As a result, the pre-tax loss is now expected to amount to €250-280m.
With the exception of Mannesmann (i.e. tubes), all divisions saw their ASPs falling in the last quarter. Consequently, and with the exception of Strip Steel and Technology, all divisions suffered from pre-tax losses. In fact, both Plate/Sections and Mannesmann are now showing a pre-tax loss for 9M 19.
Having given a dismal pre-tax profit guidance for 2019 (€125-175m), management now expects a loss for the current year.
Delivery volumes and sales prices are driving the steel industry’s profits. Salzgitter’s Q2 numbers for both Strip Steel and Plate/Sections showed falling volumes and falling ASPs. As a result, not only divisional earnings fell but also consolidated profits were down as well.
Salzgitter holds a 25% stake in Aurubis, the copper smelter. This affiliate has contributed extremely volatile at-equity profits in recent years and was expected to contribute rather high earnings in the coming years. This seems to be under threat.
Salzgitter holds a 25% stake in copper refiner Aurubis. This stake was lowered a while ago as Salzgitter had issued a bond that was convertible into Aurubis shares. The stake has again been increased to 25% in Q1 19 and the revaluation of the stake plus its at-equity profit contribution increased stated earnings by around €43m. The reported profit increase was less than that.
Salzgitter had released preliminary revenue and profit numbers for 2018 in early February and has now released its annual report. Based on management’s release in February, we had expected the dividend to be raised from €0.45 to €0.60 but the final proposal is €0.55. In addition, we had expected the balance sheet to show net debt at the end of 2018 (€69m), but the number has actually increased to €95m.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Salzgitter AG. We currently have 43 research reports from 2 professional analysts.
NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat
Companies: NextSource Materials Inc
Capital Access Group
Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost
Companies: Falcon Oil & Gas Ltd.
Cavendish
Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten
Companies: Beowulf Mining PLC
Alternative Resource Capital
i3 Energy announced that its 2024 guidance consists of expectations to drill 10.5 net wells (7.6 net wells in Central Alberta, 1.9 net wells in Simonette and 1.0 net wells in the Clearwater play) with 85% of capex allocated to the second half of the year. Total capex expenditure for the year is guided at $US 50.9m. The company indicated that it intends to commence pad drilling of its Montney acreage in Q1 2025 and we perceive the company is bulking up for that significant growth opportunity for
Companies: i3 Energy Plc
WHIreland
Companies: FOG PHC FEN BBSN ELIX
Despite end market demand remaining difficult in several regions Trifast has announced that revenue and profitability will be marginally ahead of the guidance provided at the end of January. Self-help initiatives instigated during 2023 are starting to come through providing visibility on the majority of the £3.0m savings identified to come through in the current financial year (Mar FY25). Zeus estimates were in line with guidance of £230m revenue, £11.5m EBIT and £6.0m PBT. We leave forecasts un
Companies: Trifast plc
Zeus Capital
Companies: 88E CNC FTC TRCS HEIQ CREO ZAM
Beowulf is an AIM/Spotlight-listed developer of two flagship assets; Kallak, a high-grade iron ore project in Sweden and the Grafintec Graphite Anode Materials Plant. The Company's Kallak North project has the potential to produce 2.5mtpa of high-grade, premium iron ore concentrate suitable for the growing green steel industry in Sweden. Additionally, Grafintec's Anode Material Plant Project is well positioned to serve the growing EV battery supply chain in Europe, whilst supporting EU plans
SP Angel
I3 has released its work programme and budget for 2024, alongside providing guidance for the year. This represents a larger programme than 2023, with the focus now shifting to greater operational activity and production gains given the additional balance sheet strength achieved in recent months.
Companies: MPE TRI VNET BVXP HVO
• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril
Companies: SINTANA ENERGY
Auctus Advisors
Companies: Touchstone Exploration Inc
Shore Capital
Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August
Companies: Jubilee Metals Group PLC
Companies: Ferrexpo plc
Liberum
Companies: AURA OMI AAL KAV POW BMN EST SVML
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