Ferrexpo Share Discussion Threads

[telbap] 12/1/2017 19:18

JJ......agree with your sentiment. I still feel it has the be the ogre of the possible repeat "placing" of shares which, as we all know, are in the market already. If they go ahead with a repeat performance of last year's debacle, then we will see a sell off down to 120, maybe 110. Then once the dust has settled the share price will rip it up to 200.Aim is a l

[jjhbev] 12/1/2017 11:13

Morning all

Well, the production update confirmed the sort of figures that I guess we expected. Personally I had hoped for a little more production and a little more cash but – bearing in mind the comment about “refurbishment of the travelling grate in the pelletiser” (whatever that is) – I assume that production was negatively affected and some cash was spent on capex. I had also hoped that we might see some modest expansion plans for this year but there is no indication of that. But, IMO the absence of any significant capex being incurred does make the restoration of a dividend very likely.

Other points of note for me were the increased cash costs and the (as already known) increase in average iron ore price as compared with average 2015. The average cost of $29 pt for 2016 implies a cost for H2 of appx $32. This is slightly higher than I had hoped albeit that the lower level of production (and perhaps higher cost associated with the FPP+ product?) will have been a factor. In any event sales prices will have increased much more than the increase in costs so – rather like Lemmink over on LSE – I am expecting H2 net profits of 20p+ per share.

We now have approx 2 months until the financial results and – in the absence of any macro news – I do not expect much change in the share price prior to then. Personally I believe that the fundamentals and the current market prices support a price very much higher than the current one however with so much investor attention focusing right now on the diversified miners I just don’t see us moving forward much until March. I hope I’m wrong!!

Although there remain various risks to investing here one thing I will restate is that IMO company debt is no longer one of them. It seems to have been totally lost on most analysts just how much things have changed at Fxpo over the past year but the following summary debt figures highlight the progress made. The Net Debt figures shown below are the gross debt less cash balances

December 2015
Gross Debt $903m
Net Debt $868m

June 2016
Gross Debt $797m
Net Debt $753m

Dec 2016
Gross Debt $735m (My estimate based on debt repayment profile)
Net Debt $590m

At year end Fxpo had $145m of cash. Debt repayments scheduled this year are $200m. Given current market conditions Fxpo will have more than this in cash prior to the release of the financial results.

Another important debt figure is the Debt to EBITDA ratio. At Dec 2015 this was 2.78x for Net Debt/EBITDA. I believe EBITDA for 2016 will be well in excess of $400m (it was $160m for H1) and so I expect the ratio for end 2016 will be less than 1.5X. The positive implications for both debt service and debt refinancing are clear – but currently only the Deutsche Bank analyst seems to agree!!

[onedb1] 12/1/2017 08:29

Must say that I felt the RNS was good and with cash pile increasing I was surprised to see the market not reacting . Then iron ore is substantially trading at much higher prices than achieved on average in H2 . Add to that the amazing Chinese demand we are seeing , beating all expectations . Seems like market is napping here . Not surprised to see £2 plus at some point . Even the debt situation is turning around at a much faster than expected speed. Margins as we are told in the RNS are good at $55 . Well market is much higher at the moment . So go,figure

[telbap] 11/1/2017 16:48

Giles....yes but extremely unlikely as the first sale was under pressure.No they don't have to, but wtfks? Maybe the lure of millions of dollars in the bank is stronger than holding frexpo stock??

[gilesgraves] 11/1/2017 13:47

Yes. Sounds great Granto. Saw your posts on lse. Regarding this share sale. Is it possible that the seller bought back everything they sold already. Would that be allowed. Also, do they HAVE to sell the second tranche?

[granto2] 11/1/2017 12:46

anyone notice the new product….Premium Plus pellets +++.

[telbap] 11/1/2017 12:20

I feel the issue holding us back is IF our friendly holder will sell that balance of his holding now we are back up at 140 plus......if this happens we should see another share price dive but quicker recovery as the demon of a possible stock dump will not be looming over us again ......all imho...

[onedb1] 11/1/2017 12:10

Yup and as we saw overnight iron ore demand in China is still fantastic . IG's market analyst from Melbourne was this morning talking about this too

[telbap] 11/1/2017 10:35

Rising nicely, reasonable vols, 150 plus and we will hit traders radar, should whoosh then.

[napoleon 14th] 11/1/2017 09:54

onedb - let's hope you're right - I'm looking for same

[telbap] 11/1/2017 08:02

One.....140 on the cards.

[onedb1] 10/1/2017 16:14

Completion of what I perceive to be wave 3 of the super cycle = 165-170 with wave 5 in the 200s. Just my view though .

[telbap] 10/1/2017 11:25

Better chart today.....appears we are heading to 140s with some good vols. If we break thru 145 on volume tomorrow, we are back on track.

[telbap] 10/1/2017 08:22

One dB.......what's your target?

[onedb1] 10/1/2017 07:28

Not that we currently need them to be so high but overnight iron ore futures were flying . Based on the RNS yesterday Fxpo did very well cash wise on an average which is considerably less than today's prices . Remaining long here as the fundamentals have improved and my view on my TA targets is unchanged

[napoleon 14th] 09/1/2017 22:25

granto2 - agreed.
pb - who said "he" will sell shares again? & in what way? To get highest price?
Change tactics perhaps?

Pity it faded to the close...

[telbap] 09/1/2017 11:55

Granto......yep they must look pretty stupid ...onwards and upwards to 150

[granto2] 09/1/2017 09:35

Overhang shares?
He may or may not sell. They last time he sold his timing was awful and clearly his reasons were personal and did not reflect on the company performance, as today's figures prove. He should have waited.
Todays Figures?
simply excellent. the ratings agency that predicted they would not have the cash to pay their bills must be slightly red=faced today looking at $154m in CASH.

[pbutterworth1] 09/1/2017 09:00

Cant decide how much the possible forthcoming shareholding sale (end 90 day rule 25th Jan) is weighing here

[woodpeckers] 09/1/2017 07:50

Looks like a good trading update to me.

Record sales, average pellet price up US$3 per tonne and cost of production down almost US$3 per tonne. Cash balance up US$110M and US$196M of debt was retired during 2016.

[mark_jm] 06/1/2017 12:13

are we expecting a production update on Monday here?

[onedb1] 03/1/2017 15:08

Also just released PMIs in the US . all were very positive , ( I am aware the US uses a different type of Iron Ore but its significant to see the world's number one economy start with good PMIs into a new year . Manufacturing hit 65.5 vs 55.5 forecasted and 54.5 previous , so that is good news overall .

[onedb1] 03/1/2017 15:06

Hi BB

I follow PMO too. Still long there am waiting for the break out IF it comes .

As for FXPO , the MFI divergence is obvious to me, the last low in MFI was achieved much lower in price terms . So IF am reading it right( and that is the issue ) it may turn from these levels. After all premium pellet prices are stable and pretty high. Nothing changed to the bad so fingers crossed. Stop loss is about 10p below entrance for me .

[bellbottom] 03/1/2017 14:36

Hi Onedb1

I do hope you are right as I am on the cusp of another purchase of FXPO myself, having disposed of a tranch of PMO this morning for a reasonable profit.

Good luck.

[onedb1] 03/1/2017 14:18

Looking for the level to enter on this pullback , need to be quick before the RNS on production . 130p seems about right to me , adding a third position to my overall . Am not seeing anything to suggest a reason for a pullback other than justified profit taking . But that should be more or less done at 130p . Am seeing a divergence on MFI ( money flow index ) and with reduced volumes this gives me confidence the pullback is losing steam and reached its low on this swing. Hoping am right as 130 order is placed I'll take 130.5 . Lets see if right or wrong .