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The group released a solid set of results for Q1 22 It is maintaining the guidance issued in April We still believe that the current macro context could hurt We will fine-tune our numbers, with no major impact on our target price at first sight
Companies: Salzgitter AG
AlphaValue
As expected (and communicated in the preliminary results), the FY21 results were very sound. The group benefited from high volumes and sky-rocketing prices. The guidance is supportive, even if it does not integrate the latest geopolitical developments. We are therefore a bit sceptical that the group can achieve its (unchanged) targets for the current year.
The group presented its strategy to reach its 2030 environmental targets. Altogether, it looked like a marketing exercise and we ended up a little bit frustrated by the lack of financial targets, among others. Our numbers will not change after this event.
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.
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.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Salzgitter AG. We currently have 0 research reports from 2 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
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 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
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
SP Angel
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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