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.
Companies: Salzgitter AG
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.
The company has released preliminary numbers for 2018 (final accounts will be out on 27 February). Revenue was up by some 3% to around €9.3bn and profit before tax increased by 46% to €347m. We had expected €9.08bn and €335m, respectively. The higher than expected net profit number is the consequence of lower extraordinary costs, which fell from €83m to €63m and which we do not regard as extraordinary.
For the current year, management sees revenue rising to €9.5bn (+some 2%) but pre-tax earning
Salzgitter’s 9M numbers were just ahead of our expectations. Revenue increased by 1.7% to €6.93bn, EBIT by 42% to €332m, and pre-tax earnings by 63% to €285m. Our respective numbers had been €6.89bn, €318m, and €265m.
Management continues to see revenue coming in at just above €9bn (our projection is €9.09bn), but instead of a pre-tax profit range of €250-300m, it now sees it reaching €300-350m (our projection is €310m).
Management argues that this improved profit outlook is the result of protectionist measures taken by the EU. As a result, the inflow of steel coming from China has not developed as expected earlier. Whether the new trade barriers between the USA and China will lead to another change in the p
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Jubilee today announce the full year results for FY 2021 ending in June 21. It was a year of continued progress with revenues up 143% to £133m (from FY 2020), adjusted PBT up 324% to £52m and eps up 93% to 1.8p/sh – an extraordinary year – but still only the beginning of the progression in our view. Continued developments in South Africa have led to a fully flexible chrome and chrome tailings solution at Inyoni. Supply from a wide variety of sources (Run-Of-Mine, new tailings from own operati
Companies: Jubilee Metals Group PLC
Jubilee operates several chrome-Platinum Group Metal (PGM) operations in South Africa. Growth will come from its Zambian two-refinery strategy where it is expected to produce upwards of 31kt/year of copper (in cathode and concentrate) with an, as yet, undefined contribution from cobalt. The strategy has benefited from the acquisition of the Nkana refinery from Mopani (Zambian-government owned), which provides many logistical and technical benefits to Jubilee. Jubilee remains on a growth trajecto
Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
Solaris Resources (“Solaris”, “SLS”) has announced its intention to place its non-core assets in Ecuador, Peru, Mexico and Chile into a separate entity, to be spun off as “Solaris Exploration Inc” in due course. Solaris Resources will continue to focus on its world-class flagship Warintza project, with a streamlined structure likely to boost its attractiveness to potential acquirers or strategic partners. Meanwhile, the newly created company will highlight other assets in the portfolio which cur
Companies: Solaris Resources Inc
Savannah today announces that it is amicably terminating its JV arrangement with Rio Tinto over the Mutamba Minerals Sands project in Mozambique. Savannah has been paid $9.5m (which translates into 0.4p/sh) in cash to relinquish the 20% it has earned in the project and will cease all activity in country. All staff will transfer to Rio Tinto.
Companies: Savannah Resources Plc
Across a broader market sell off EQTEC have shown resilience and is trading at 1.55p, above its placing in May, up 25% from one month ago.
Companies: EQTEC PLC
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What’s cooking in the IPO kitchen?
Trinistar Liverpool S.a r.L announces its potential listing of a newly formed single asset company which will own the Capital Building in Liverpool on the IPSX. Upon admission the Company would become a real estate investment trust (REIT). The Capital Building occupies close to a 3.5 acre freehold site in the centre of Liverpool’s business district; the building comprises c425,000 square feet of predominantly of
Companies: ADBE ADBE SYM ARC AVCT CMCL CLIN DCTA FRAN OSI
We initiate coverage of Tungsten West Ltd (“TUN” or “the company”) with a GBp144/sh price target. TUN is focussed on the re-opening of the Hemerdon Tungsten Mine in Devon, UK, which was previously owned and operated by Wolf Minerals (UK) Ltd (“Wolf”). Since acquiring the project in Nov’19, TUN has resolved issues encountered by Wolf and optimised the project further with new revenue streams and technology. In March 2021 TUN produced a Bankable Feasibility Study (“BFS”) for Hemerdon, validated by
Companies: Tungsten West Plc
Deeside project update
Savannah Resources is a hardrock lithium exploration and development company with a 100% interest in the Barroso Lithium Project in the Northern Portugal hosting 27mt at 1.06% Li2O for ~700kt LCE, the largest spodumene lithium resource in Western Europe. Project environmental permitting is currently in progress paving the way for the completion of the Feasibility Study and eventual project financing. The project benefits from the strategic location as Europe rapidly expands it Li-ion batteries a
Companies: Shanta Gold Limited
Cornish Metals has now released the results of 10 drillholes at its continuing exploration programme at United Downs near Camborne. Including two holes drilled on the property by Cornish Lithium the drilling shows up to 5 mineralised structures with a total of twenty-two individual mineralised intercepts.
Even though the area has been mined intermittently between the early 1700s and the late 20th century, the drilling evidence bodes well for the delineation of additional mineral resources wh
Companies: Cornish Metals Inc.
Initiating Coverage: Price Target 20p
Potential Beyond Tin
AfriTin Mining Limited (ATM) is one of only three listed tin producers in Western markets. It has a large (820km2) land package in Namibia comprising 5 prospective licenses of which the Uis mine is the most advanced and already in production. Near term growth is being delivered with an 80% increase in tin production between 2022 and 2024. However, this is only scratching the surface and there are more than conceptual plans being fo
Companies: AfriTin Mining Ltd.
Savannah Resources has sold its interest in the Mozambique mineral sands project (Mutamba) to JV partner Rio Tinto for $9.5m in cash. The payment has already been made to one of Savannah’s UK subsidiaries.
Given Barroso’s importance and capital requirements over the coming months, we view this as very good news. It allows management to dedicate all its time to Barroso and reduces future SAV equity dilution. Despite the strong lithium price and exceptional performance of ASX and TSX lithium sto
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Companies: TGN AFC COIN COIN HL/ OMI