Anglo Pacific Share Discussion Threads

[haydock] 16/1/2013 12:57

Lies damned lies & CHARTISTS>
Try the japanese cloud my friends if you want a signal.



-
Tue

APF

London 20-Dec-12
267.75

Bull

Senkou Span Cross

Strong

[drewz] 16/1/2013 12:52

Unfortunately, it's just not coming together for APF these days and the longer term trend remains down.

I expect 230p to be revisited in coming weeks.

[haydock] 16/1/2013 12:44

I'm in this for the CDN coal !
Ask Piedro, even he is beginning to believe it might be a worthwhile asset.
It's still on the books for next to nowt.

Cheers
Niels & the other long termers.

[nielsc] 16/1/2013 12:14

An increasing yield does very nicely for the long terms holders though. An effective yield of around 7% based on my average buying price of 140p.

The capital appreciation is a nice bonus too.

I'm in this for the long run.

Cheers,
Niels

[quepassa] 16/1/2013 10:27

What dreadful underperformance against the market by APF over three years.

Beginning 2010 Share price around 260p.
Beginning 2012 Share price around 260p.
Beginning 2013 Share price around 260p.


Just not happening any more for APF.

The non-existant share price performance over this extended time-frame for APF(despite an increasing yield) speaks for itself.

ALL IMO. DYOR.

QP

[christh] 15/1/2013 13:56

MELBOURNE--Rio Tinto PLC (RIO) is placing a bold bet on Asian demand for iron ore, pushing ahead with a multibillion dollar expansion of its Australian mines despite sharp swings in prices that forced many of its rivals to curb expenditure

Rio Tinto, which produced a record 253 million metric tons of iron ore globally last year, Tuesday said it was targeting a more than 50% increase in its output capacity in the remote Pilbara region of Western Australia state within three years. The decision comes as iron ore prices hover close to 15-month highs after rebounding nearly 80% since September on signs that China's economy is improving.

Mining investment in Australia is flickering back to life after a challenging several months that saw the industry scale back or delay projects worth more than US$60 billion on an uncertain outlook for China's appetite for commodities like copper and iron ore. BHP Billiton Ltd. (BHP) put off a decision on expanding its Pilbara port operations, while Rio Tinto closed offices and cut staff.

In a sign that confidence is returning, Fortescue Metals Group Ltd. (FMG.AU) said late December it planned to restart development of the US$1 billion-plus Kings iron ore deposit in the Pilbara. It had put the project on ice in September after being caught out by the sudden fall in the iron ore price, which also forced it to renegotiate its vast debt pile with lenders.

Rio said Tuesday it has approved the expansion of rail, port and other infrastructure needed to grow its annual production capacity to 360 million tons by mid-2015 in the Pilbara, an area that accounts

roughly 40% of the world's sales of iron ore by sea. It had already approved an increase to 290 million tons annually by the end of this year, which management said remains on schedule.

"This was another year of strong operational performance across the group," Chief Executive Tom Albanese said in a statement. "Markets remain volatile, but our business continues to perform well."

Rio Tinto's production of iron ore from mines in Australia and Canada rose 4% in 2012, ahead of guidance given by the company in mid-October for output of about 250 million. Production from the Pilbara mines alone was 239 million tons, or more than 90% of the total.

The ports that Rio Tinto uses to ship its iron ore in the Pilbara were closed for 87 hours this month as the first tropical cyclone of the season passed along the coastline, but the company said its mines and trains continued to operate at full capacity. Cyclones regularly strike the region from December to late April, and often disrupt production.

Despite the recovery in iron ore prices, Mr. Albanese said Rio Tinto was continuing to take action on costs to protect its mining profits.

The coal division, in particular, has been targeted and Rio said it continued to actively reduce controllable costs in the business in response to weak prices and the strength of the Australian dollar.

Rio Tinto's Australian production of hard coking coal used to produce steel fell 11% in 2012 to 7.86 million tons, in part due to maintenance at its Hail Creek mine and a plant shutdown at the Kestrel mine as part of an expansion project. Production of thermal coal used in power generation rose 15% last year, with a larger 37% jump in the fourth quarter compared with the corresponding period of 2011.

Among other commodities produced by the Anglo-Australian company, copper output rose 6% in 2012 owing to a recovery in ore grades, but aluminum production was 10% lower than in 2011 following a strike at a smelter in Canada.

[christh] 15/1/2013 13:49

Well done, in your profits but the company has royalties from other investments to make up for coal sales.
I thnk you sold too early as the target price is 320-340p.
Every time there is weaness you accumulate.
I will not sold my stake as this is my pension nest, the divi is increased at 8% of the previous divi every year.

Now probably we have a graphite royalty to extract the graphine, the new big thing in commodities perhaps an extract of coal.
I take it pencils will become expensive now!

The prices on commodities are much stronger against the volatilty of currency.
Gold will still be the strength of the economy that's why China and India are buying it big time.
Iron ore isin great demand in the far east with China still absorbing all the production to meet its growth.
And the furnaces are burning more and more coal to shape up the iron.

Kee Buying, price is too cheap.

[contrarian2investor] 15/1/2013 12:45

On 8/08/12 (see post no 5851) I bought APF and today I have sold them for a 14% return excluding dividends. Metal prices might be rising but Rio Tinto's major plant shutdown at the Kestrel coal mine will hit APF's income.

[christh] 05/1/2013 12:44

YEARLY DIVIDEND GROWTH FOR APF.
Assuming the dividend grows by 8% year upon year as it has been doing
for so many years.

YEAR-SHARES--DIVIDEND-TOTAL-----%-----INTERIMS-----TOTAL YEARLY
2013-20000- 0.106000 -2120.00 -8% -0.008374 -0.O14374
2014-20000- 0.114374 -2287.48 -8% -0.009036 -0.12341
2015-20000- 0.123410 -2468.191 -8% -0.009749 -0.133159
2016-20000- 0.133159 -2663.178 -8% -0.010520 -0.143678
2017-20000- 0.143678 -2873.569 -8% -0.011351 -0.155029
2018-20000- 0.155029 -3100.581 -8% -0.012247 -0.167276
2019-20000- 0.167276 -3345.527 -8% -0.013215 -0.180491
2020-20000- 0.180491 -3609.824 -8% -0.014259 -0.19475
2021-20000- 0.194750 -3895.000 -8% -0.015385 -0.210135
2022-20000- 0.210135 -4202.705 -8% -0.016601 -0.226736
2023-20000- 0.226736 -4534.718 -8% -0.017912 -0.244648
2024-20000- 0.244648 -4892.961 -8% -0.019327 -0.263975

[noslien] 03/1/2013 17:09

The recent run has been very positive and I am hoping this will break through 300p in the next 2-3 months. Even at that level I think this share is modestly valued for such a well run company.

[haydock] 18/12/2012 16:31

I thought they were not fond of Africa ?
Puzzling choice of region.

We had a Bull signal with the japanese cloud, recently.

[christh] 18/12/2012 10:51

excellent news.another royalty secured.

Gold will never lose its shine, safer than currency.

Still on target, pattern repeated.
Will it break the 340p last years resistance?

I have pencilled in 400p for 2013.

[gavapentin] 16/12/2012 16:49

interesting how the price has strengthened

[haydock] 11/12/2012 09:32

Nowt new, common sense as usual.

I agree with Piedro.

[piedro] 11/12/2012 08:32

... simply put ...

They will not issue script dividends
at less than book value

... v. sensible IMO

P.

[nielsc] 10/12/2012 21:08

QuePassa,

Being a long term holder I know they have done this in the past. 22nd Dec 2008 the scrip dividend was cancelled. The share price then was below a £1.

That is just one instance.
I would disagree that they are "changing a long-standing scrip dividend policy", more a case of them deeming when it is appropriate.

Anyway the share price has done well since the end of 2008 :-)

Cheers,
Niels

[quepassa] 10/12/2012 19:24

In my view, not a positive sign that the scrip alternative has been halted on the current interim dividend.

It is not stated if this is a one-off situation or not.

In my experience, companies tend to halt scrip alternatives when they have concerns about the p/e metrics of the enlarged post-scrip number of shares in issue.

Issuing new shares will de facto negatively impact upon the income per share ratios of any company, noticeably so where profits may be flat-lining or falling in a given company.

Issuing new shares will mean that a larger number of shares will need to be serviced for dividend payments going forward. This means that if profits were to stagnate, a company may need to pay a marginally lower dividend per share than before if the company does have not have a correspondingly larger pool/volume of money available for dividends.

Alternatively a company would have to generate greater distributable profits to service/maintain the dividend at historic levels on the larger number of shares.

Halting scrip may remove any "moral" obligation for management to take shares instead of cash.

Halting scrip means cash now which is a less risky scenario for any shareholder.

Companies generally like scrip alternatives so that it preserves cash for them which can be used for other purposes. But they generally need to have a buoyant outlook to service a growing number of shares at the same or increasing dividend payment level.

Changing a long-standing scrip dividend policy can in certain circumstances perhaps be interpreted as a signal of some corporate change of circumstance or fortune.

In my experience, companies freeze or halt scrip when they are concerned about the evolution of future profit trends and paying dividends on a greater number of shares.

Halting scrip in my experience suggests possible corporate change of view about servicing share dividends on an enlargened share pool, ie having to make larger dividend payments going forward.

In my experience, freezing scrip is not a positive signal for share price performance.



ALL IMO. DYOR.

QP

[tigmi] 28/11/2012 10:49

Good find Haydock.

[haydock] 28/11/2012 10:36

I am also a big fan of royalty companies. The business model obviates a lot of the negatives in mining. And let's be honest, mining is a very difficult business. They say Murphy works overtime; things can and do go wrong. But royalty companies tend to obviate all of that because for the royalty company, the first dollar in is normally the last dollar in. In other words, when the royalty company decides a royalty is worth $200 million (M), it pays $200M. It may never get a penny out of that royalty, but that's the worst that can happen. It is not obligated to put more money up. It is not obligated to talk to the government to try to negotiate tax rates. And if tax rates go up, it doesn't really matter because most royalties are net smelter returns, on net profits. It is a return on what is produced and it doesn't matter if the tax rate goes up or the company has to move a village; it's all irrelevant to the royalty company. I like the royalty model a lot. Royalties are expensive.

[quepassa] 21/11/2012 08:59

Results to-day from sector bell-weather JMAT - Johnson Matthey - contain the following :-

Commenting on the results, Neil Carson, Chief Executive of Johnson Matthey said:

"Against a difficult market environment, particularly the impact of lower average precious metal prices, Johnson Matthey delivered growth in operating profit from Environmental Technologies and Fine Chemicals, although this was more than offset by the weaker performance of Precious Metal Products. Underlying earnings per share were maintained at 72.9p.

Whilst precious metal prices have improved from their lows during the summer, largely due to the labour unrest in South Africa, the outlook in some of our other markets has weakened and visibility remains limited. We therefore expect that the group's performance in the second half will be similar to the first half of the year."


This is not at all encouraging news or a postive outlook for the precious metals sector as a whole from a key player in that sector.

ALL IMO. DYOR.

QP

[nielsc] 14/11/2012 22:21

pineapple1:

Yes it doesn't look great chart wise.

QuePassa:

Yes softer royalty income, but how much softer. Royalty rate have improved for Kestrel which will lessen the impact of lower coking and thermal coal prices.

From the RNS on the 31st Oct
"Group earnings per share for the nine months ended
September 30, 2012 were 10.51p compared to 29.39p for the comparable period of 2011."

So they have covered the full div of around 10p from 9 months earnings. With Kestrel pulling in cash again I would expect dividend cover to be around 2 for next year. So they will still have a little cash to make a few royalty plays.

They are the kind of company that get a good deal in the current climate with many small miners finding it tough to get cash. Would be nice to see them do a few deals, but they may be prudent and not splash too much cash.

We will have to see if the continue increasing the dividend and by how much. Perhaps a little less than in the past, but still provides a decent yield of around 4%.

You still thinking of buying at 200p?

Cheers,
Niels

[quepassa] 14/11/2012 16:13

Agreed.

Their cash pile is diminshed so, taking in to account APF's desire 1. to make further investments, 2. the forthcoming cost of the last dividend, and 3. generally softer royalty income, personally I find it hard to see how APF can continue growing their dividend at the same rate.

The nine month graph since the March peak looks dire and would indicate to me that the share is firmly now locked in a downward trend with significantly further to fall.

ALL IMO.

DYOR.

QP

[pineapple1] 13/11/2012 09:36

Yes not looking good.Chart now looks awful but i thought i looked fine a while back....lol.Volume is so low here it must be a peice of cake for anybody to throw it around.Nice divi though to compensate if one wishes to wait out the storm.Personally i think the top is in on markets.Rally in the markets the next day or so followed by a plunge end of Nov into yr end according to the cycles i follow.......imho