Daldrup & Söhne - Termination of coverage

Edison Investment Research is terminating coverage on: • 2G Energy (2GB) • Apontis Pharma (APPH) • Artec technologies (A6T) • Beta Systems (BSSA) • Blue Cap (B7E) • Cyan (CYR) • Consus Real Estate (CC1) • Daldrup & Soehne (4DS) • DATAGROUP (D6H) • Datron (DAR) • Delignit (DLX) • Deutsche Börse (DB1) • Deutsche Grundstücksauktionen (DGR) • Deutsche Rohstoff (DR0) • DVS Technology (DIS) • Edel (EDL) • Ernst Russ (HXCK) • Exasol (EXL) • expert.ai (EXAI/EXSY) • Fashionette (FSNT) • Formycon (FYB)

Daldrup & Söhne - Business as usual during pandemic

Daldrup & Söhne (Daldrup) reported business as usual in H121 despite the COVID-19 pandemic. Management maintained its FY21 guidance of a total output of around €43m and an underlying EBIT margin of 2–4%. The long-term growth prospects for Daldrup are very positive because geothermal energy offers a great alternative to fossil fuels for governments’ policies on reducing carbon emissions. Geothermal electricity and heat are generated in an almost CO2-neutral manner.

Daldrup & Söhne - Emission reduction will drive drilling demand

Daldrup & Söhne (Daldrup) felt hardly any impact from the pandemic, reporting 14% growth in total output in FY20. Divestment of the loss-making power plants, efficiency improvements in business operations and more effective cost control were the drivers behind the strong recovery in profitability. The market outlook remains positive, driven by the aim of many governments to reduce carbon emissions, while geothermal electricity and heat are generated in an almost CO2-neutral manner. Management ex

Daldrup & Söhne - Leading drilling specialist in Central Europe

Daldrup & Söhne is a leading drilling specialist in Europe and focuses on energy topics such as geothermal heat recovery, environmental protection and drinking water quality. With its drilling services, the company provides its customers geothermal energy sources as an alternative to fossil fuels. Over the next few years, Daldrup also aims to build up a portfolio of minority interests in medium-sized geothermal power plants, especially heating plants. Market conditions in the drilling segment re

Daldrup & Söhne - Profitable again in H120 with further upside

Daldrup & Söhne reported a strong set of results in H120, with minimal impact from the coronavirus-pandemic. Total output increased by 5% to €23m, driven by positive sentiment in the drilling market, and EBIT turned positive to €0.5m after a loss of €1.0m in H119. The company won several large contracts this year, proving that market conditions in the drilling segment remain positive, driven by customers’ long-term goal to increase renewable energy sources and reduce carbon emissions. Management

Daldrup & Söhne - New business focus should benefit FY20

FY19 was a year of significant change for Daldrup & Söhne (D&S), marked by the disposal of Geysir Europe. With a strengthened balance sheet, a renewed focus on its drilling activities, a healthy order book and further improvements to internal control mechanisms targeted, the management board (and consensus forecasts) expect an improvement in profitability in FY20.

Daldrup & Söhne - Reshaping the business

Daldrup & Söhne (D&S) continues to implement its corporate restructuring programme and in July it sold 49% of Geysir Europe to IKAV. H119 results showed a small decline in profitability versus H18 (but an improvement versus FY18) and D&S believes the transition will continue into FY20. The executive board continues to guide for a total group output of €40m and an operational break-even for FY19. Consensus remains more optimistic than guidance and based on consensus forecasts, D&S is trading on a

Daldrup & Söhne - Improving outlook expected for 2019

Following a disappointing 2018, Daldrup & Söhne has embarked on a strategic realignment. Although the realignment will take some time to bear fruit, the outlook for FY19 appears more promising and the financial position of the company should improve after the recently announced disposals. For FY19 Daldrup & Söhne is expecting group revenue of €40m and a breakeven performance at the EBIT level. Based on consensus forecasts, the company is trading on an EV/Sales multiple for 2019 of 1.2x, towards

Daldrup & Söhne - Favourable growth outlook

Daldrup & Söhne (D&S) continues to increase its presence in geothermal generation and was recently awarded a new drilling concession for the Neuried claim. The order book remains strong and the macro environment is positive in our view. Daldrup & Söhne is on track to meet FY18 management guidance and we believe further growth is likely in the coming years.

Daldrup & Söhne - Increased profits and business activity

Daldrup & Söhne made progress in building its presence in geothermal generation during FY17 and this is expected to yield additional benefits in FY18. A stable regulatory framework, an order book at record levels and additional geothermal projects under development (Neuried and Puchheim) are also expected to contribute to growing profitability in the forecast period (see consensus forecasts).

- Improving profitability and order backlog

Daldrup & Söhne continues to benefit from regulatory support for geothermal energy in Germany. This is evidenced by its order backlog of €75m to date, sufficient to support its full engineering capacity for all business divisions into 2019. Meanwhile, its geothermal power plants in Landau and Taufkirchen are scheduled to come online before the end of 2017. Management confirmed, in a press release on 4 October, FY17 guidance of €40m in output (revenue plus change in work-in-progress) and an EBIT

- Running at full capacity through 2018

Daldrup & Söhne is benefiting from the regulatory support for geothermal energy, primarily in Germany. This is evidenced by its order backlog of €65m to date, sufficient to support its full engineering capacity for all business divisions through 2018. Meanwhile, management is stepping up efforts in project development and ownership to help counterbalance the volatility of the drilling/engineering business with predictable revenue streams as an independent power producer.

Alien Metals - Hancock Project, Mining Lease Granted

Alien today reports intraday that the Western Australian Government has granted a mining licence for the Hancock iron ore project for a 21-year term. The granting of the mining licence is the latest milestone delivered by Alien as it advances the project towards development and production.

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

SP Angel Morning View: Gold resilient as US interest rates climb on long-term inflation concerns

NextSource Materials - Initiation

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

I3 Energy (I3E LN) - Canada royalty assets sale

I3 has announced the sale of the majority of its royalty interests in Canada, for US$24.8m cash. This allows the company to fully repay amounts drawn on its debt facility and create a working capital surplus, giving I3 significant additional funding flexibility going forward

Jubilee Metals - Operational Update Q3 FY2024

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

DEC FY23 Results Update

DEC reported FY23 results which were in line with expectations and announced the acquisition of joint venture assets from Oaktree along with an updated capital allocation framework.

SP Angel Morning View: Global Li-ion battery demand reaches all-time in Q1 2024

Zeus Top Picks for 2024 - 2023 review and outlook for 2024

On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div

Gulf Marine Services (GMS LN) - Contract award

GMS has announced a new contract award, at improved day rates, adding to order book and overall revenue momentum.

Challenger Energy (CEG LN) - £1.5m strategic investment in Challenger

Challenger has announced a £1.5m investment in the company from investor Charlestown Energy. This now allows Challenger to be fully funded for the foreseeable future as it works towards closure of its significant Uruguay farm out to Chevron, and the US$12.5m cash payment to be received once this is achieved.

Tethys Oil AB (SSE: TETY): Increasing further the size of the prize

• The South Lahan area on Block 58 is estimated to hold 55-523 mmbl prospective resources (P90-P10 case) with a mean case of 251.8 mmbbl prospective resources across six prospects in the Ara Carbonate. • Combined with the previously disclosed prospective resources of the Fahd area in the north-eastern part of Block 58, Tethys Oil’s unrisked recoverable prospective resources on the block are estimated to be 435.9 mmbbl (Pmean). • The geological chance of success ranges from 6% to 11% for the six

Is there a “big-picture” change in the cards?

We note that this morning’s announcement by Aminex for a significant potential resource increase in the Ruvuma basin. We believe that the recent pullback in the share price (likely due to delays in the first gas production schedule) provide a good risk/reward opportunity, especially given the future potential in next 12-24 months, highlighted by today’s announcement.

JEV: Exploring Spin-off for Hydrogen Assets

What you need to know: • JEV announced that it has commenced a strategic process to explore the spin-off of its hydrogen portfolio. We view this as a strong positive for shareholders. • Over the past month, JEV also closed a $2.2M private placement and amended the terms on its debentures, setting up the Company for this transaction. Yesterday after market close, Jericho Energy Ventures Inc. (JEV:TSXV, JROOF:OTC) announced that it has commenced a strategic process to explore the spin-off and s

Morning Note – 4 April 2024