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Q3 21/22 results came in slightly above consensus at both revenue and EBITDA levels. All four segments benefited from these positive trends. Net debt declined despite the build-up of working capital. Both the volatility of raw material costs and the surge in energy costs towards the end of the third business quarter are said to have been challenging, despite robust margins in this quarter. Almost all customer segments continued to be well oriented.
Companies: voestalpine AG (VOE:WBO)voestalpine AG (0MKX:LON)
AlphaValue
H1 21/22 numbers were largely in line with market expectations. All divisions performed well and, in particular, Steel and Metal Forming. Higher energy costs were felt towards the end of Q2, with no impact on the group’s FY guidance. We will revise our numbers marginally, with no major impact on our target price.
The results came in quite substantially above the company-compiled consensus at result level Growth was particularly strong in the Steel division and Metal Forming on both higher prices and volumes The aerospace segment’s performance is still subdued The outlook for the current year makes our forecasts conservative We will revise our numbers upwards
The 20/21 fiscal year ends up with a very decent profitability level The group has also managed to reduce the net debt level quite substantially The outlook for FY21/22 is positive, supported by still firm steel prices We will fine-tune our numbers and valuation on this rather sound release
Nine months results were in line with market forecasts The group raised its EBITDA guidance to the upper end of the previous range The momentum concerns most segments and backs the group’s more positive tone We will revise our forecasts and, most of all, the valuation of the group to reflect better the current momentum in the group’s businesses
Companies: voestalpine AG
Carbon Steel, High Performance Metals and Metal Engineering all generated higher prices than in the previous two quarters and the increase rate was higher than before. However, all three divisions saw their Q3 volumes fall by between 0.4% and 16% compared to last year. This was one of the reasons for collapsing earnings. In addition, impairment charges of €345m burdened the group’s EBIT.
We had expected voestalpine to deliver EBITDA of around €1.35bn this year and EBIT of around €560m. Based on management’s new guidance, EBITDA will amount to some €1.2bn and EBIT will be just above the break-even line.
While carbon steel prices increased through to Q4 18/19, they fell by 2.5% in Q1 and by 3.3% in Q2 of the current fiscal year. Simultaneously, the price increases in High Performance Metals and Metal Engineering moderated from Q1 to Q2. In view of this, all divisions suffered lower profit margins.
Shipment and prices (on both the output and input sides) are driving the steel producers’ profits. Whereas Voestalpine’s output prices were reasonably good, all of its divisions suffered volume setbacks. In addition, input prices were up. While consolidated sales fell by 3.8% to €3.34bn, CGS increased by 0.2% or €5m. Consequently, the gross margin fell by 3.2pp to 19.6%.
Voestalpine released profit warnings in October 2018 and again in January this year as demand had moderated. In addition, its carbon steel prices, which were up by double-digits in the first two quarters and above €1,000 per ton until late last year, were still up by 5% in the last quarter, but the absolute number was in the vicinity of ‘only’ €980. All of this contributed to the profit fall.
In fact, as some of these costs (see below) were not tax deductible, Voestalpine suffered a net loss of €56m after minorities in the last quarter. The group’s revenue increased by 5% to €9.95bn in the 9M18 and EBITDA fell by 22% to just above €1.1bn. Our projections had been €9.85bn and €1.16bn, respectively. As a result of a much higher than anticipated tax rate, net earnings fell by 53% to €247m whereas we had anticipated €325m.
Voestalpine’s experience in the USA has been rather disappointing. Costs of the Texan direct iron ore reduction plant were considerably higher (more than €900m instead of €550m) and the ramp-up took longer than initially expected. Management now blames ramp-up difficulties at an automotive component plant in Georgia, resulting in a new profit warning. Finally, the company has been regularly raided by cartel authorities (tracks in the past and now heavy plates) in recent years and the costs are b
Voestalpine was able to increase its prices faster in the last quarter than in Q1 18/19, but the delivery volume of Carbon Steel fell. This resulted in a Q2 consolidated revenue increase of 5% to €3.21bn, whereas EBITDA was down by 24% to €347m and net earnings by 48% to €84m. We had expected a slightly lower revenue number but clearly higher profits.
Voestalpine generates some €1.3bn of its revenue in the USA. This represents about 10% of the group’s worldwide revenue. According to management, about two thirds of this is produced locally. The company and its clients have asked the US authorities for duty exemptions on a total of some 4,300 products. They have received 2,640 answers and 2,360 have been positive, i.e. these products are exempted from the extra duty charge of 25%. As a result of this, about 3% of the group’s consolidated reven
The standstill of a blast furnace because of a general overhaul had put some pressure on Q1 shipments and profits. This will continue in the current quarter but management is confident that this negative impact will end in October when the blast furnace goes back into production. In spite of this, the group’s profit numbers were very reasonable indeed.
Research Tree provides access to ongoing research coverage, media content and regulatory news on voestalpine AG. We currently have 0 research reports from 2 professional analysts.
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
i3 Energy announced that its 2024 guidance consists of expectations to drill 10.5 net wells (7.6 net wells in Central Alberta, 1.9 net wells in Simonette and 1.0 net wells in the Clearwater play) with 85% of capex allocated to the second half of the year. Total capex expenditure for the year is guided at $US 50.9m. The company indicated that it intends to commence pad drilling of its Montney acreage in Q1 2025 and we perceive the company is bulking up for that significant growth opportunity for
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WHIreland
Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten
Companies: Beowulf Mining PLC
Alternative Resource Capital
Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost
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Cavendish
Beowulf is an AIM/Spotlight-listed developer of two flagship assets; Kallak, a high-grade iron ore project in Sweden and the Grafintec Graphite Anode Materials Plant. The Company's Kallak North project has the potential to produce 2.5mtpa of high-grade, premium iron ore concentrate suitable for the growing green steel industry in Sweden. Additionally, Grafintec's Anode Material Plant Project is well positioned to serve the growing EV battery supply chain in Europe, whilst supporting EU plans
SP Angel
I3 has released its work programme and budget for 2024, alongside providing guidance for the year. This represents a larger programme than 2023, with the focus now shifting to greater operational activity and production gains given the additional balance sheet strength achieved in recent months.
Zeus Capital
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Despite end market demand remaining difficult in several regions Trifast has announced that revenue and profitability will be marginally ahead of the guidance provided at the end of January. Self-help initiatives instigated during 2023 are starting to come through providing visibility on the majority of the £3.0m savings identified to come through in the current financial year (Mar FY25). Zeus estimates were in line with guidance of £230m revenue, £11.5m EBIT and £6.0m PBT. We leave forecasts un
Companies: Trifast plc
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• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril
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Auctus Advisors
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Shore Capital
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
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Liberum
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