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Manganese (Mn) is an essential metal with numerous applications across various industries, particularly in the production of steel and stainless steel, and its growing use in electric vehicle (EV) battery technology. Nearly 90% of manganese produced globally is used in the steel industry. Manganese alloys impart properties like hardness and strength in products ranging from automotive steel sheets to construction materials. Manganese also finds chemical applications in fertilizers, batteries, a
Companies: ERA E25 OMH VALE3 ERA ERA S32 ERA AAL OMHI
eResearch
On the occasion of yesterday’s first-ever Capital Markets Day, the group presented its strategy and elaborated on the new growth investments for the years to come. Some of these are under way, the outcome of which will have to be evaluated in terms of opportunity and risk. That said, we remain a bit cautious in the short-term on manganese and nickel, where prices are still depressed owing to the tough macro environment.
Companies: Eramet (ERA:EPA)Eramet SA (ERA:PAR)
AlphaValue
The trading statement for the Q3 23 showed the expected sharp contraction in sales, leading to yet another reduction in the group’s guidance (the fourth in a row). No uptick in prices is expected for Q4. Lower input costs are helping, but the fall in profits is spectacular. We will not change our estimates materially (at least for FY23) since we had expected this negative development. In our view, there is room to improve the group’s communication.
A military coup is going on in Gabon, a key country for Eramet This is where the group mines…100% of its manganese, its biggest segment The outcome of the coup is obviously uncertain, but the negative impact could be massive In any case, expect at least disruptions for this business We will put a discount on the segment, implying a significantly reduced target price given its size
Companies: ERA ERA AAL FRG BHL UFO PREM
SP Angel
The H1 23 results were significantly below market expectations. Prices were the main trigger for these weak numbers, even if volumes were also down. The FY23 “adjusted EBITDA guidance has, again, been revised downwards despite the strong performance in Weda Bay (38.7% held) which hides a pretty tough year for the rest of the business”. We will revise downwards our numbers for FY23 substantially, as well as going forward in all likelihood.
As expected, revenues in Q1 23 were significantly down on both a yoy and sequential basis. This is mainly due lower prices and somewhat lower volumes in manganese. As a result and considering the current price levels, the group has revised its FY23 EBITDA guidance downward by some 9% on an adjusted basis. We still do not appreciate the new reporting of the group (i.e. adjusted vs reported) which does not help transparency in our view.
Eramet released an expected set of results for FY22, which showed a higher level of profitability and a significant decrease in indebtedness. Looking forward, the context is less favourable due to declining prices but no one expected such operating conditions to last forever. The outlook suggests that our numbers are too high and we will amend these at least for FY23 while we will integrate the first benefits of the Lithium project, whose commissioning is expected in FY24.
The group’s revenues were firmly up in Q3 on a yoy basis. They nonetheless showed a significant slowdown qoq, mainly due to prices, which should remain under pressure in Q4, leading the group to lower its EBITDA guidance for FY22. We will fine-tune our numbers and valuation to the downside, even if the group’s new projects look promising.
The group released a strong set of results for H1 22 These were supported by volumes, but most of all prices The latter should be less favorably oriented in H2 The group marginally increased its FY EBITDA target (from €1.5bn to €1.6bn) We will fine-tune our numbers, with no big changes expected Our TP may look optimistic given the less favorable momentum on commos writ large, even if we feel comfortable with our recommendation
Prices were strong across the board in Q1. The operational performance was also satisfactory. The group has raised its FY22 guidance. We will upgrade our numbers and price target after this release.
The FY21 results came in rather above the group’s guidance. The production of manganese ore, the exports of nickel ore and the production in Weda Bay have all steadily increased. The disposal of Aubert&Duval is good news. Including ongoing disposals, net debt would be a mere €388m. The outlook is unsurprisingly bullish, even if it may be adjusted throughout the year, with current nickel and manganese prices currently very supportive.
Eramet will proceed with the Lithium project in Argentina The group will join forces with Chinese Tsingshan First production is due in FY24 We appreciate the group’s diversification, particularly in “green” raw materials
The Q3 trading statement shows a pretty strong rebound in activity. The pricing situation remains favorable in most of the group’s segments. Eramet upgraded its EBITDA guidance for the full year to “close to €1bn”. We will also upgrade our numbers on the back of these solid Q3 revenues.
The H1 21 results were significantly up on volumes (manganese) and prices Current prices suggest a further improvement in profitability Seasonality should also give it a boost The group raised its FY EBITDA guidance We will revise our forecasts upwards
Research Tree provides access to ongoing research coverage, media content and regulatory news on Eramet SA. We currently have 15 research reports from 6 professional analysts.
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
WHIreland
Trinity has announced a c28% reduction to its 2P reserves following a YE23 review. Despite the decrease in the Company’s 2P reserves, Trinity’s core business remains robust, with a reserves/production ratio of >12.5 years at YE23. Whilst there is significant potential for growth within the current portfolio, this will be difficult to unlock from the current balance sheet and we believe further financing will be required. We update our target price to 76p (from 202p), a c85% premium to the curren
Companies: Trinity Exploration & Production Plc
Cavendish
Companies: BILN ELCO NXQ CUSN ATG
• The Nong Yao-13 exploration well in the new Nong Yao D area that was targeting multiple zones has encountered >30 feet of new oil play across several new shallow intervals which have not been produced elsewhere on the concession. These reservoirs are believed to be recurring across the Nong Yao D area. • The drilling result confirms that oil has successfully migrated into this area of the block (a factor that was seen to be a risk in the Nong Yao D area) and open the opportunity for further a
Companies: Valeura Energy Inc.
Auctus Advisors
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
Companies: i3 Energy Plc
Zeus Capital
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
Companies: 88E RNO TRIN KRM EXR BOOM
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.
Companies: Diversified Energy Company PLC
Dowgate Capital
Chariot, Energean, Touchstone Exploration, Longboat Energy, Hartshead Resources, BP, Helix Exploration, PetroTal, Pantheon Resources, Caspian Sunrise, Petrofac, DNO ASA, Valeura Energy, Aker BP, Var Energi Source: FactSet, weekly change 08/04/24-12/04/24 Oil rose as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world’s crude output. An assault is expected to come as soon as the next 48 hours, which
Companies: HHR TXP LBE CHAR
Union Jack has released an update on its Wressle asset, reporting maturing production from Wressle-1, alongside progress for significant further development activities on the field going forward.
Companies: Union Jack Oil Plc
Companies: PLL TLG HZM SAV KAV KP2 SVML
Pharos Energy reported FY23 results on 27 March. Group net production of 6,508 boepd (FY22: 7,166 boepd) was in line with guidance, assisted by successful development drilling in Vietnam and exploration successes in Egypt. Pharos’s strong cash generation resulted in a stronger balance sheet, with net debt reduced to US$6.6m (from US$28.9m at the end of 2022) and cash balances totalling US$32.6m. This left the group free to return more cash to shareholders, including a 10% increase in dividends,
Companies: Pharos Energy PLC
Progressive Equity Research
Shore Capital
Hunting has released its Q1 trading statement, reporting a strong period for OCTG and Subsea, steady growth in Advanced Manufacturing, and a softening in Perforating Systems.
Companies: Hunting PLC
Union Jack announced an operational update on its onshore UK Wressle field and confirmed plans to announce the payment of a cash dividend to shareholders along with the FY23 results in May. Wressle continues to deliver material revenues to the Company, generating positive cash flow and providing it with sufficient cash resources to fund shareholder returns and invest in new development projects.
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