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The Q1 22 results came in above consensus, driven by a significant impact from prices.
Less steel from Ukraine and Russia and strong demand explained the still-healthy pricing situation.
Going forward, the planets will not stay this aligned with respect to demand in a context where world economies are slowing.
Higher input costs also will start to weigh.
We will upgrade our (too low) forecasts but remain cautious in terms of opinion, since the momentum will become less favorable.
Companies: SSAB (SSAB-A:STO)SSAB AB Class A (SSAB.A:OME)
A very strong Q4 to end a record year
The outlook is positive going into FY22
The net cash position will help the group finance the green transition
We will revise our numbers upwards
The group Q3 report was very solid across the board, with a huge impact from prices leading to record results.
Cash was of course strong, with the group now almost debt-free.
Management is confident for Q4, both in demand and prices terms.
We will revise upwards our numbers and valuation.
H1 numbers came out as impressive as expected
The group posted the best ever quarterly results despite higher input costs
SSAB is now almost debt-free, leaving room for acquisitions/capex
The outlook for Q3 remains positive
We will revisit our numbers even if longer-term visibility remains low
Q1 21 results came in above expectations
Prices have pushed margins, while input costs grew under-proportionately
The outlook for Q2 is very positive
We will revise upwards our numbers and target price
Q4 results exceeded expectations on higher volumes
Cash flow was also quite strong and the group’s balance sheet remains solid
The outlook for Q1 21 is positive on volumes and prices
The group will also benefit from the cost-cutting carried out in FY20
We will revise upwards our forecasts and target price
Companies: SSAB AB Class A
The Q320 numbers came in under market expectations on continued low prices and demand.
The group’s tone is more optimistic going into Q4
We expect to lower our estimates, at least for the current year
The impact on valuation will be limited
Q2 was obviously strongly impacted by the pandemic
Results remained decent though, thanks to cost cutting and lower variable costs
The tone of the release suggests some optimism going forward
We will revise our numbers a tick to the upside, particularly going into FY21-22
Q1 20 was in line, showing a recovery vs the weak Q4 19
The outlook is obviously gloomy with a sharp fall in demand expected for (at least) Q2
The financial structure remains solid, giving some room-for-manoeuvre
We will still revise downwards our forecasts and target price
Q419 came in lower than expectations mainly due to destocking in Europe and maintenance in the US
The outlook for Q120 suggests some improvement from this low basis
Profitability for FY19 remained decent though, and the balance-sheet clean (gearing below 20%)
We will most likely not change our numbers/target price much
Q3 19 results were below our and the street’s estimates
No drama, but the weakening of the macro context is now being felt
Q4 is set to look quite similar, prompting a downward revision of our numbers
The key issue is now the start of FY20, on which visibility is still low
SSAB’s Q2 results were decent, albeit lower than expectations
Iron-ore prices and a weakening European demand were the key factors
The Q3 outlook is rather cautious
Valuation ratios look rather cheap, but investors will be happy to wait until visibility improves
- Nice start into FY19
- Q2 could be a bit more challenging on rising input costs and weakening demand in a few segments
- We will revisit our numbers, with no major changes expected in terms of valuation
FY18 results: revenues reached SEK74,941m (+13.4%), EBITDA SEK8,952m (+17.9%), EBIT SEK5,181m 3,838m (+35%) and net profit SEK3,805m (+65%). Net cash flow was SEK3,435m, leading to a net debt at the end of 2018 of SEK8.6bn (vs SEK10.2bn in Q3, SEK11.9bn in Q2 and SEK11.6bn at year-end 17) compared to a target of SEK10bn. The dividend proposed is SEK1.50, significantly higher than in 2017 (SEK1.00). In terms of outlook, the tone is rather positive for Q1, with demand expected to remain fairly sta
Q3 in line with expectations. Market trends still supportive for Q4, despite macro-econmic turbulences. Deleveraging continues and allows for capacity expansion in the US. Despite the low visibility into FY19, our numbers are unlikely to change materially and our recommendation will remain the same.
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Forecast and valuation update
Companies: IOG PLC
Companies: Savannah Energy Plc
With several opportunistic but timely acquisitions in 2021, coupled with the recent surge in the oil price, Zenith Energy has, in our view, completely transformed itself and its value proposition to investors. While for various reasons it has not been easy for the market to fully recognise and reward this transformation, we expect 1) doubling production, 2) further strengthening of its balance sheet and 3) becoming Free Cash Flow (FCF) generative this year, will make it difficult for the market
Companies: Zenith Energy Ltd.
Alternative Resource Capital
We are increasing our fair value estimate for Pantheon Resources to 208p, from under review (previously 184p). The change reflects what we believe was an unambiguously positive winter drilling campaign. This full note details the background analysis to the change in estimate of fair value, which includes a valuation table and an assessment of the forthcoming Alkaid#2 well.
Companies: Pantheon Resources plc
Chariot has signed a front-end engineering and design (FEED) agreement with Schlumberger and Subsea 7 (the Subsea Integration Alliance) for the Anchois gas development project. Chariot and the Subsea Integration Alliance will adopt a “one team” integrated and collaborative approach to fast-track first gas from Anchois to maximise the return on investment for all stakeholders. The scope of work covers all the development's offshore elements including well completions and subsea production systems
Companies: Chariot Limited
RCS-1 flow testing results
Companies: Arrow Exploration Corp.
Trinity has announced the commencement of its highly anticipated onshore drilling campaign. The Company's fully funded, six well drilling programme will target an aggregate 450-1,100mmbbls of reserves at a cost of US$14-17m. In addition to drilling four “conventional” low angle wells, Trinity will also drill one horizontal well and one deeper appraisal well, with both the horizontal and deeper appraisal wells having the potential to deliver substantially higher production and economic returns ve
Companies: Trinity Exploration & Production Plc
EQTEC has reached a key milestone in its Southport energy from waste project with the appointment of Anaergia as EPC and O&M partner. This is a complex project using multiple waste treatment solutions and we see EQTEC’s inclusion as a demonstration that it’s technology can combine with these to create an optimal outcome.
Companies: EQTEC PLC
Wentworth has announced a positive operational update ahead of its AGM to be held later today. Daily production year-to-date (YTD) has averaged 92.2MMscf/d, a c15% YoY increase (2021: 79.9MMscf/d) and ahead of Wentworth's 2022 guidance of 75-85MMscf/d. As noted previously, the strong performance of the Mnazi Bay asset YTD has allowed Wentworth to increase its total dividend distribution in respect of 2021 to 1.7p per share, a yield of c7.1%. Mnazi Bay continues to supply Tanzania with half of th
Companies: Wentworth Resources PLC
• Section II of the Northern Peruvian Pipeline has been temporary re-opened.
• As a result, 0.72 mmbbl of PetroTal’s Bretana oil has been tendered at the Bayovar port by Petroperu for the July lifting. This oil previously entered the pipeline in late 2020 for which PetroTal was paid just ~US$45/bbl at the time.
• PetroTal will receive the difference between this price and the price at which Petroperu will sell the oil in July (~US$120/bbl), generating over US$60 mm of price adjustment true-up r
Companies: PetroTal Corp.
Wentworth has announced the acquisition of a 25% non-operated working interest in the Ruvuma PSA from Scirocco Energy for an initial consideration of US$3m plus contingent payments of up to US$13m. The consideration is structured to ensure that the majority is only paid in a success case, providing Wentworth with a low-cost entry point into a high growth opportunity. The transaction has the potential to nearly double the Company's production by 2026 and add over 190Bcf of 2P reserves on a Final
Completion of commissioning of Kiln 3 at Vanchem last month keeps Bushveld on track to end 2022 with a sustainable production run rate of 5,000-5,400t V pa, a solid platform from which to refocus on longer-term growth. Fully utilising the vast array of processing infrastructure at Vanchem to treat feed from an expanded mining and ore concentration operation at Vametco makes a lot of sense given the fixed component of costs at the former and the large mineral resource at the latter. Bushveld’s re
Companies: Bushveld Minerals Limited
• 2022 YTD gross production was 92 mmcf/d, ahead of our expectations of 89 mmcf/d for 1H22.
• The FY22 production guidance remains unchanged at 75-85 mmcf/d. It looks very conservative in our view.
• The company currently holds US$26 mm in cash and no debt. This is in line with our expectations.
• TPDC continues to be current with regards to receivables.
• We re-iterate our target price of £0.45 per share.
Steady growth and dividend
Our Core NAV for the company based on its 2P reserves only i
Savannah, which operates the Barroso lithium mine project in Portugal, reports today the results of its locked cycle test to determine optimal flotation reagents to confirm lithium recoveries and spodumene concentrate grades. Savannah is aiming for a 5.5%Li2O concentrate grade with a near 80% recovery. The reported work confirms that these should be possible and that in larger scale, bulk testing these parameters may improve. The work also highlights that there are still optimisations to be h
Companies: Savannah Resources Plc