Anglo Pacific Share Discussion Threads

[grahamburn] 30/3/2022 15:11

On an allied subject, surprised there hasn't been any discussion on here (so far as I can recall) on the change to paying dividends in US dollars which was announced a few months back.

The announceent today confirms this and states that the exchange rate on the record date will determine the amount paid in other currencies (eg Canadiaan dollars or sterling).

This introduces a degree of volatility in shareholders' potential returns over which they have zero control. OK, a change in exchange rates between announcement and records dates could be favourable, but it could also be detrimental to actual receipts/returns.

[grahamburn] 30/3/2022 15:04

That doesn't make sense, Phillis, as 22 May is a Sunday

[phillis] 30/3/2022 11:43

Final divi payable on 1 June, record date 22 May
( taken from annual report notes)

[bisiboy] 30/3/2022 08:59

would have liked to see a 1p special and increase in qtrly to 2p as a marker.

[masurenguy] 30/3/2022 08:40

Early profit takers provided the opportunity for a small top up under 176p. 🙂

[laurence llewelyn binliner] 30/3/2022 08:32

#Woodhawk, the dividend will need to be approved at the AGM, then the dates will be released to us..

SP action this morning is a typical sell the news event, now rebounding strongly where I expect its journey north to continue, the company is in a stronger position not a weaker 1, looking at the predicted income for 2022, a 200 pence share price should just be the beginning.. :o)

Cash USD +22M
Debt -112M
Net debt -90M

Q1-2022 net debt forecast to be -60M
H-2022 net debt could be -20/30M
Q3-2022 cash positive.. :o)
Q4 Incoa/BRN step up bought for cash..?

New 500 series Kestrel panel strip bought to secure 2023 income..



Marc Bishop Lafleche, chief executive designate, said that the near-term outlook overall is very strong and the company will use the cash flow being generated first to reduce net borrowings (of US$60mln) and then to look for new investments..

[the deacon] 30/3/2022 08:28

Agreed. The best deals to allocate fund to is Piaui and Incoa. Imagine negotiating a deal like Piaui in today's market. It'd be multiples of what we're paying.

[cocopah] 30/3/2022 08:22

I have the ex-divi pencilled in for the 9th of April, payment on the 4th of June. I guess this is probably from the last full year before the dividends were pushed back. I am a bit surprised at the dividend although agree with the rationale and it was somewhat signposted in the last update.

[johnrxx99] 30/3/2022 08:05

Excellent results. Glad they are reserved on the divi, paying down debt with still firepower. It will be hard to do a good deal in the current environment but the previous ones are doing great.

[gateside] 30/3/2022 07:54

Cheers Woodhawk - that's why I couldn't see a date then!

[woodhawk] 30/3/2022 07:52

There's no date specified, Gateside.

[gateside] 30/3/2022 07:49

Any see in the results when it goes ex-dividend for 1.75p and when it's paid?

[andydaf] 30/3/2022 07:44

Results as expected.This year there is every chance that APF can emerge cash positive.Hard to predict but if coking coal can stay above 300 kestrel will make serious positive adjustments to the balance sheet.Q1 is going to be storming and fully expect it to be another record haul.As always GLA

[masurenguy] 30/3/2022 07:41

"Far better to smash the debt down and get it gone, with less interest payments eroding profits, and buy our next royalties from cash reserves.....the share price will make up for the smaller final payout.. :o)"

Totally agree LLB.

[sporazene2] 30/3/2022 07:35

agree on that LLB, no reason why the share price wont be heading towards 2019 high of 225p over the the next few months. We are right in the sweet spot of the royalty business model IMO.

[laurence llewelyn binliner] 30/3/2022 07:28

Far better to smash the debt down and get it gone, with less interest payments eroding profits, and buy our next royalties from cash reserves..The value of the company just increased with retained earnings not being paid out..Not to everyones liking I am sure but long term holders will see the value of the decision, furthermore it spells out the BOD discipline to restrict the debt burden, in contrast to so many companies addicted to debt fuelled growth and exposed to rising interest rates which we are not going to be..Fine by me, the share price will make up for the smaller final payout.. :o)

[sporazene2] 30/3/2022 07:21

2022 outlook appears to be very strong and likely net cash at year end. There are a number of development stage lithium projects that will be looking for funding over the next 12-18 months and I think we are in a tremendous position now, especially given the inexplicable valuations of some of those companies related to their project NPV and likely EBITDA margins.

[the deacon] 30/3/2022 07:15

I'm very happy with that. It's important APF has as much firepower as possible to execute on new deals. Overall a very decent set of numbers.

[masurenguy] 30/3/2022 07:13

Financial Highlights

-- Record annual portfolio contribution of $85.6m (2020: $47.5m) with 45% of this generated in the final quarter

-- Portfolio contribution comprises $77.3m of royalty and stream income, $8.0m of other royalty related revenue, $4.3m of other portfolio contribution less $4.0m of stream cost of sales

-- Record results driven by strong performances at Kestrel and Voisey's Bay - with the former producing $26m in Q4 2021 - over 50% of total contributions in FY 2020

-- Profit after tax, of $37.5m (2020: Loss after tax $23.9m), which includes valuation and impairment charges and reflects a $30.5m valuation increase, primarily for Kestrel and EVBC, and a loss on disposal of the Narrabri royalty of $19.0m

-- Basic earnings per share of 18.03c (2020: loss of 13.23c)

-- 60% increase in Adjusted earnings(1) per share to 25.18c (2020: 15.69c)

-- New longwall panel added to 500 series mine plan at Kestrel, increasing expected volumes within the Group's private royalty lands by 10% and smoothing expected volume stepdown over the remaining life of the royalty

-- 21(st) century commodities now represent 75% of the Group's royalty assets on the balance sheet (2020: 32%)

-- Net debt at year-end of $90m (2020: $33.3m) reflecting the $205m Voisey's Bay acquisition in March 2021 and the fact that the record Q4 2021 revenue was not received until January 2022

-- Pro-forma net debt at 1 April 2022 expected to be $60m, with H1 2022 cashflow expected to drive rapid deleveraging

-- Final dividend proposed of 1.75p per share which will take the total dividend for FY 2021 to 7p per share in line with the Company's guidance during the year

-- $120m of liquidity available to finance further growth initiatives

-- Our model means that we are fully exposed to commodity prices but do not have direct exposure to operating cost inflationary pressures - a highly attractive position to be in given current commodity and inflationary dynamics

-- The record Q4 2021 portfolio contribution was based on an average coking coal price of $308/t - which is half the current spot price

Recent geopolitical events and impact on commodities

The record 2021 results precede the dreadful tragedy currently unfolding in Ukraine. The Company has made a donation to The Disasters Emergency Committee to assist with the unfolding humanitarian crisis. The ramifications of the invasion by Russian forces has the potential to create significant global economic consequences for the foreseeable future. The initial impact of the severe sanctions being placed on Russia will likely result in an energy shock not seen since the early 1970s, at a time when inflation is already running significantly above long-term averages. In times of significant inflation, hard assets such as commodities are expected to outperform. We are seeing material commodity price increases, particularly for commodities from which the majority of the Group's near-term revenues are derived, as illustrated in the table below.

Coking coal: 182%
--------- --------- --------- ------ ---------
Cobalt: 60%
--------- --------- --------- ------ ---------
Vanadium: 50%
--------- --------- --------- ------ ---------
Copper: 10%
--------- --------- --------- ------ ---------
Uranium: 64%
--------- --------- --------- ------ ---------
Gold: 9%
--------- --------- --------- ------ ---------

Coking coal prices have now reached levels of $600/t - the highest price level ever achieved. To put this into context, the coking coal price this time last year was $120/t. The record quarter we achieved at Kestrel in Q4 2021 was based on an average daily coking coal price of $308/t. Although we are not assuming that pricing will remain at these levels, but given that volume levels are expected to be at a similar level to FY 2021, the outlook for the year ahead could produce a wide spectrum of possible outcomes. We calculate that a $50/t increase in the coking coal price should produce an additional $3.5m of revenue per quarter.

Julian Treger, outgoing Chief Executive Officer of Anglo Pacific, commented:"I am delighted to report a record year for Anglo Pacific, with contribution 80% higher than in 2020 and 17 times higher than when I joined back in 2013. I am extremely proud of the team and our achievements transforming the business. There remains huge potential for Anglo Pacific, and I leave the Company in safe and talented hands and in a strong position for further growth."

[woodhawk] 30/3/2022 07:13

I am not happy about the lack of the special dividend.

[laurence llewelyn binliner] 30/3/2022 07:07

There we have it 1.75p finalNet debt USD90M01.04.2022 net debt USD60MBut, a new 500 series Kestrel panel added to smooth the exit income out..We are going to be almost debt free by H1, what a result.. :o)

[the deacon] 29/3/2022 22:21

APF wouldn't have any issues using their credit facility for Piaui and Incoa. I suspect it'll be a bit of both cash and RCF.

[podgyted] 29/3/2022 22:18

"I hope we don't have to resort to further equity dilution."

Really don't think so - with @$40m quarterly cash generation currently.

[sporazene2] 29/3/2022 22:03

I would much prefer debt to be paid down and keep the divi at 1.75p; new CEO coming in and I would think that he would be looking to put some longer term foundations in place which is fine by me. We have Incoa and Piaui coming up to fund and I hope we dont have to resort to further equity dilution.

[woodhawk] 29/3/2022 18:27

4.75p final would make it a nice round 10p for the year. Surely they can manage that? 2020 showed no increase, so I think they should keep it progressive rather than stagnant.