Business slowed by slightly more than expected in the Q3.

The Q3 23 results showed a marked slowdown vs Q3 22 and, to a lesser extent, sequentially. The stainless segment was to blame, while High-Performance Alloys continued to perform reasonably well. in a context of lower sales, the cash generation was solid and came in better than expected, which further improved the balance-sheet. We will adjust our numbers and target price downwards but see no real drama in these results.

A rather expected Q2 23

Acerinox released an unsurprising set of results. Europe was still weak, while the US did much better, as expected too. The High-Performance Alloys division is doing well. Its different cyclicality is a clear plus for the group. We will not change our numbers much after the release.

A rather healthy start to FY23

Acerinox released a very decent and consensus-beating set of results for Q1 23. Despite the headwinds in stainless in Europe, the group’s geographic balance has helped it improve its results significantly vs Q4 23, thanks to the US and to the smaller Performance Alloys segment. We will upgrade our forecasts at least for the current year, despite the fact we are rather at the high-end of expectations.

An expected normalization of the stainless steel market

Similarly to what peers Aperam and Outokumpu had already communicated, Acerinox posted a very strong performance in FY22, even if there was a significant slow down in Q4. For sure, the current year is likely to be less spectacular, even if no disaster is in sight. We had already factored in this likely scenario looking forward and will not change our numbers and target price materially after this release.

Q322: softer, but still very decent

Acerinox released a decent set of Q3 numbers in the current circumstances. Margins (EBITDA) remained in double-digit territory despite higher energy prices and softer demand. The group is guiding for a lower EBITDA in Q4 vs Q3, which is no real surprise. We will revise our estimates a tick down after these numbers. The valuation however remains undemanding.

Nice Q1… but some headwinds ahead

Acerinox released a solid set of numbers for Q1 22 These were supported by healthy demand and very strong prices, while the Alloys segment is slowly recovering Net debt is only increasing due to the working capital build-up Despite the fact we will revise our (too conservative) forecasts upwards, we may not change our target price materially

FY21 results in line and sound prospects going into FY22

The FY21 numbers came in well in line with the street’s and company’s guidance. The pricing situation has remained good in Q4 and going into FY22 despite the less positive comments on costs (energy and freight), of course if the geopolitical context does not worsen. Net debt is under control. This comes despite a €460m increase in working capital and allows for a significant return to shareholders. No big change to our numbers to be expected after this release.

A solid set of results, with a supportive outlook

The nine months results came in above expectations. This was true for both the Stainless Steel and High-Performance Alloys divisions. The outlook released by the group is very supportive for Q4 21 and possibly Q1 22. We will revise our numbers upwards.

A very solid Q2 and outlook

The Q1 21 results were excellent with the positive trend witnessed since H2 20 continuing in Q2 The final demand and the rebuilding of inventories explain this strong upward trend Anti-dumping measures, in both the US and Europe, supported this trend Margins (13% at EBITDA level in Q2, 14% in Stainless) not seen since 2006 The outlook (at least for Q3) is very supportive Despite the lack of visibility after Q3, we will upgrade forecasts and target price

Q1 21: a nice start to the year

Q1 results came in above expectations The stainless steel segment was very supportive The Alloys segment was still underperforming despite an improving order-book The group’s margins were close to historical highs We will fine-tune our numbers after this positive release

A sound environment

FY20 results came in above expectations The integration of VDM seems to be going alright The outlook for Q1 21 is rather promising We will upgrade our numbers and target price

Q3 20: not bad these days

Q320 again showed the resilience of the group However, High Performance Alloys remained weak Q4 set to be of the same vein as Q3 No major changes to our numbers

A nice H1 20 in the current context

H1 20 results were almost stable on last year’s Even if the group benefits from the first consolidation of VDM, the group’s performance was very good in Q2 given the context The outlook calls for a stable situation vs Q2 The group seems on track to reach our numbers for the current year

FY19 in line before extraordinaries and a decent outlook

FY19 numbers were in line with impairments, inventory write-downs and exceptional items leading to lower than expected net results Net debt is well under control, a good piece of news ahead of the VDM acquisition The latter will be the main earnings growth driver in the short term, we believe The outlook looks decent, with no real comment so far on the Coronavirus outbreak

Q3 19 results: not bad after all

Q3 19 came in line and was in fact slightly higher than the group’s own guidance. Margins thus remained rather healthy given the context, showing the efforts made on the cost side. Cash flow was pleasing and deleveraging is still on the cards. Europe was still suffering (imports and economic slowdown) but the US was supportive. Q4 should be similar to Q3, while visibility is low on 2020. We will marginally adjust our numbers to the downside.

i3 Energy (I3E LN) - Canada site visit review

Last week we attended a site visit to i3’s assets in central Alberta in Canada – the company’s largest producing area. We were left with a favourable impression of the magnitude of the company’s operations in the region, of the professional operational running of these, and of the overall level of opportunity in this well-established oil and gas province.

Reabold Resources - Payment received from Shell

Good news for Reabold, which is set to receive £5.2m of the second tranche payment from Shell imminently for the Victory gas field it acquired last year. The final £4.4m payment is due once the development approval for the field is received from the NSTA in the coming months. These funds will allow RBD to progress its two onshore gas developments in the UK and Italy and consider further distributions to shareholders. Partner funding of these projects remains an issue, but RBD’s risk/reward profi

Oil & Gas - Cavendish sector note

88 Energy, Falcon Oil & Gas, Trinity Exploration & Production, Plexus Holdings, Baron Oil, Harbour Energy, EnQuest, Capricorn Energy, Arrow Exploration, Southern Energy, Serinus Energy, SDX Energy, Panoro Energy, Eco (Atlantic) Oil & Gas, OKEA ASA, Equinor Source: FactSet, weekly change 27/11/23-1/12/23 Oil extended declines, closing out a sixth straight weekly drop, as the OPEC+ output cuts announced Thursday failed to dispel the market’s gloom over swelling global supplies. West Texas Intermed

Tower Resources (TRP LN) - Initiation Report (SPECULATIVE BUY, 0.12p/sh TP)

Cameroon: Ready for the Rig

Pan African Resources - Valuation up 22.2% with new gold price forecasts

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit

Morning Note – 4 December 2023

New Debt Facility – Lowering TRR Cost of Capital

We have been roadshowing Trident Royalties all week during which time the company released an announcement that they have entered into a commitment letter with BMO and CIBC for a new $40m revolving credit facility (RCF), with the potential to increase the facility to $60m via an accordion feature. The proceeds from the $40m are going to be used to repay the existing secured debt facility of $40m with Macquire in Q1 next year.

Baron Oil - Chuditch PSC – Six-Month Extension

Baron has been granted a further six-month extension to the Chuditch PSC. The end of Contract Year Two will now be 18 June 2024, at which time Baron will need to make a decision on entering Year Three. In the Third and final phase of the PSC, a final investment decision (FID) will be required on an appraisal well targeting the Chuditch discovery (Chuditch-2). Baron continues to make good progress in its discussions with potential funding partners, having previously announced that it is in “advan

Hartshead Resources - Fully Funded Solution

Hartshead has secured a funding solution with partner Rockrose Energy to fund 100% of the Phase I development costs. Under the agreement, Hartshead has the option to exchange an additional 20% licence interest for an uncapped free carry, thereby covering the total cost of the Phase I development project (financing backstop). Importantly, Hartshead maintains at its election the option not to proceed with the RockRose financing solution, and introduce other financing solutions (eg project debt, pr

SP Angel Morning View: Ford takes 8.5% stake in Indonesian nickel project as Automakers swim upstream

Southern Energy - 3Q Results and Comprehensive Update Note

Southern Energy delivered solid 3Q results with the focus of attention now turned towards the completion of 4 drilled uncompleted wells (“DUCs”). We see our investment thesis for Southern Energy – premised on the scale, location, quality, deliverability, low-cost nature of the company's Gwinville gas field in Mississippi, USA – very much strengthening based on our structural commodity price outlook and our growing confidence in the highly prolific Gwinville gas field, sharpening our interest in

SP Angel Morning View: Gold powers through $2,100/oz on outlook for Fed rate cuts

UK-Listed Energy Sector: Review of the UK oil and gas landscape – why the country needs it, current policy and tax

The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.

SP Angel Morning View: China lithium stocks rally on prospects for market rebound

Andrada Mining: Lab-scale Spodumene concentrate results further advance Andrada’s lithium strategy

Andrada Mining (“Andrada”; “ATM”) has produced its first laboratory scale high-grade spodumene concentrate from mineralised pegmatite at Lithium Ridge (ML133). The material was sourced from the drill core of three holes through two separate pegmatite ore bodies drilled earlier this year. The weighted average feed grade was 1.69% Li2O (15.2% Spodumene), with a 76% Li2O recovery, producing a 6.8% Li2O high-grade spodumene concentrate suitable for lithium carbonate production. A second drill progra