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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ferrexpo Plc | LSE:FXPO | London | Ordinary Share | GB00B1XH2C03 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.40 | -0.77% | 51.50 | 51.60 | 52.00 | 53.50 | 50.70 | 52.60 | 2,276,843 | 16:35:07 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Iron Ores | 1.25B | 220M | 0.3678 | 1.41 | 309.84M |
Date | Subject | Author | Discuss |
---|---|---|---|
17/11/2016 13:47 | Some great posts over the last few days. Undoubtedly going to have some peaks and troughs along the way, with this share. We all know the various influences on a share, including plain old sentiment. But the figures seem to stack up. Not sure about the ongoing bond situation though. Looking forward to a day when we get a divi again - might be a long way off. | bellbottom | |
17/11/2016 13:43 | Thanks for feedback Granto Like you I have run many sets of numbers - many, many sets of numbers!!! An interesting thing is that I have had to keep nudging them upwards since mid year! I don't disagree with any of your tweaks. Perhaps your iron ore estimate is a bit on the low side based on this chart but overall I suspect we are within plus or minus $10m of each other. I do wonder if they will have invested or will be investing in production upgrades given the level of cash generation??? From what the Finance Director said at the half year they could do a $1m ton upgrade for not much more than $50m. They could do that & still be pretty cash rich for 2017. One additional point for other readers is that after next year's repayments there is "only" $500+m of debt remaining - basically the bonds. If iron ore & premiums were to fall back to the lowest current estimates - i.e. $70 a ton in total inclusive of premiums - Fxpo would still generate EBITDA of $20 per ton. So, something like $240m pa. Even at this level, and taking into account capex/interest/tax it could service the remaining debt if stretched over 4 to 5 years or so. | jjhbev | |
17/11/2016 13:31 | Thanks Bellbottom Im going to read that link now. I appreciate what you're saying but I also think that the sudden rush of negativity yesterday was a Con - because it was out of date news that seemed to be pushed to the fore, together with fearful chat threads written, all literally minutes after a a 6% jump. I would be really interested to know if anyone has any views on this Zdenek Bakala share sale. As I understand it the 18% drop the other day was him selling one load at 110p and at the end of January he "must" sell another load - at the same price? Not sure.. What is correct and if so, how do people think one should trade this share in January. For example, last week of Jan, knowing this sale is coming through...what are the best / safest options? | gilesgraves | |
17/11/2016 13:26 | Good posts, gents and your 12m target SPs? | mr.oz | |
17/11/2016 12:30 | JJHBEV. Excellent post. I have ran several sets of figures myself and they are very close to yours. so aspects are the same, and some slight tweaks, but both you and I are reading the accounts and forecasting the same. I would suggest slight tweaks. The premium for H2 could be $30t because in China it can drop to mid £20s. I had average Iron at $55 but it is an estimate, I don't have a precise figure. I had EBIDTA at $210m just $5m shy of yours. In other drafts, being conservative I have it at $180m for h2, but I think $210m more likely. I had closing cash higher than you, but I agree that repayments should not be an issue in 2017 with $150m cash in the bank | granto2 | |
17/11/2016 11:49 | Thanks for the explanation on costs | daveas | |
17/11/2016 11:33 | Daveas The $25 figure is their cash costs of production per ton. The figure I have shown is their Total costs excluding Dep/Finance/Tax. The $50 figure includes every thing else. The biggest item is "Selling & Distribution" at approx $17 per ton. But it also includes "General & Admin" and "Other". The largest component of "Other" is Community Support Donations at $2+ per ton (see note 7 to interim accounts). Given that some of these costs are fixed rather than variable then if they can increase production the marginal costs associated with the extra tons will be well below $50 and so the marginal profit contribution of that tonnage will be greater. | jjhbev | |
17/11/2016 11:00 | I thought their cash costs had come down considerably due to devaluation etc to $25 per tonne as quoted in their las report | daveas | |
17/11/2016 10:46 | Meanwhile, back at the company Some thoughts on Fxpo cash flow & debt obligations following yesterday’s highlighting of the S&P view from the summer. Please feel free to question/disagree/co Starting with some actual figures from the half year figures: Sales = 6m tons. Should be less this half year, perhaps around 5.75m tons? Total costs per ton excl Depreciation, Finance & taxes = $50 per ton (rounded up) EBITDA $160m Finance costs = $38m Tax = $13m (approx 14% of pre tax profits) Net Profit = $78m Cash as at Mid Year = $45m Gross Debt at Mid Year = $790m Loan Repayments due H2 = $62.5m Loan Repayments due 2017 = $200m Moving on to assumptions for H2 2016 :- Assumed sales = 5.75m tons Assumed Avge price per ton = $90 Assumed Costs excl Dep = $50 per ton Sustaining CapEx for H2 = $25m Finance Costs for H2 = $35m Sundry Other outgoings = $10m (a pure guess) I have assumed $90 per ton based on the average price for 62% iron ore for the first four months of approx $57+ plus a premium for pellets & 65% content of £32.5+. Figures for the period from late Oct to date are significantly higher but I am assuming a drop back in iron ore to well below $60 per ton for Dec. The average I assume is probably light but equally costs are probably slightly up on $50 per ton. On the above assumptions EBITDA for H2 would be approx $225m. Turning the assumptions/numbers into a (very basic) cash flow forecast = Opening Cash $45m EBITDA $225m Loan Repayments ($62.5m) Sust Cap Ex ($25m) Finance Costs ($35m) Sundry ($10m) Closing Cash $137.5m The actual figures will no doubt be affected by other factors such as working capital movements and even possible capex on debottlenecking/expa | jjhbev | |
17/11/2016 10:36 | This article from the Kyiv Post gives an excellent summarised description of the Oligarch Banking System in Ukraine, that was dismantled by Ms Gontareva at the NBU last year. But that is only the beginning. The huge refinancing loans given out by the National Bank to these 'Oligarch' banks have yet to be paid back. Ms Gontareva is a bit like a little terrier - she's got her teeth sunk in and won't let go until the money is paid back. hxxps://www.kyivpost I realise that this, in some way, is just a side show. But it does have a bearing on our investments. When the Finance and Credit Bank was shut down lasy year, the FXPO share took a dive of 51%. I for one, want to be aware of all the factors involved so at least I can make a decision based on as much available information as possible. Good luck to all investors. | bellbottom | |
17/11/2016 10:06 | Hi Giles, Its worth checking back over the news items from last year, when the bank of Finance and Credit was first shut down by the National Bank of Ukraine. That wasn't the end of the story. There is defintely more to come in the continuing proceedings in relation to the bank's closure. This recent news item I suspect is only a continuation of investigations ongoing. Oligarch Banks were basically shut down by the NBU and investigations began as to potential illegal activities. One previous Private Bank owner is now in exile in the USA. But FXPO should be able to climb out of the potential mire, given its product and position in the global market, when we are lifted into the next great mining cycle. Hopefully this will happen sooner rather than later as my own patience is wearing thin. | bellbottom | |
17/11/2016 09:42 | Hi Giles, I'm not sure that you are correct in stating that the information on the internet reference the bank is a "complete con." And that the internet "has been intentionally flooded with false innuendo, rumour, and negative News." That in itself is plainly not true. I'd love to believe that its a complete fabrication, but its clear that the main aspect of the story is true. There may be absolutely no implications for the owner, being Mr. Zhevago and any possible illegal activity was carried out by others at the bank, if indeed that proves to be the case. What does slightly concern me is the fact that the owner is or was the ultimate beneficiary and any major transfer of funds I'd expect the owner to be fully aware of. I'm in this one for the long term and anything that has a potential impact on the trend of the share to go either up or down, makes me consider my position on a short term basis. Longer term I am positive, but this kind of news item is not something that we can ignore unless we prefer the 'head in the sand' approach to share trading. | bellbottom | |
17/11/2016 09:30 | An addition to Granto's extensive posts re Samarco (thanks again Granto). BHP are holding their AGM and speeches there include commentary on Samarco - see the RNS:- To me, the final three paragraphs are particularly noteworthy:- "Since the Plc AGM in October, the Brazilian Federal Prosecutors Office has filed criminal charges in Brazil against Samarco, BHP Billiton Brasil and Vale along with certain employees and former employees. BHP Billiton Brasil rejects outright the charges against the company and the affected individuals. We will defend the charges against the company and fully support the affected individuals in their defence of the charges against them. A lot has been done in Brazil over the course of the year. But many challenges remain. Some of them will take years to resolve fully. There will be setbacks along the way. But let me be very clear. We remain committed to doing the right thing." In line with Granto's analysis & opinion there is a clear indication of a very long timeline here for Samarco. Equally, there is no reference to actually restarting operations. | jjhbev | |
17/11/2016 07:46 | Jihbev. Sorry! credit where its due. GREAT POST THANK YOU! Granto - THANK YOU ALSO.! | gilesgraves | |
16/11/2016 18:44 | My Prediction If it folds, the Government will do all it can to seize it. So i expect a bondholder deal. Vale will do a deal to pay back the compensation fines of close to $8billion in total with BHP coughing up several billion. so Vale will face $1.8 billion in fines on Samarco $1 billion in haircut bonds. $3 billion already agreed. plus whatever the give BHP for a share. One way or the other they are looking at $6.8BILLION. and the mine can only make $700m annually and we haven;t even spoken about future safety measures. it gets worse….at what point do they realize there is nothing in this for us? worse still, all they are doing is adding iron ore to a world market and driving the price of iron ore down, all for no retained profit. Vale and BHP have a vested interest in the mine NOT reopening for as long as possible, without being seen to be thinking that way. step in the lawyers, who are professionals at delaying everything. last month the Ministry for the Environment gave them 1 YEAR to reply to their letter demanding assurances on safety etc, before a license can be given. They will use the whole year. If and when VALE and BHP ever do reopen the mine, mark my words, it will be at drip feed speed, for Health and Safety Reasons ( wink wink ) of course. Indeed, don;t be surprised if it all ends up in court and the Govt seize the mine and run it as a state asset. all this and people are talking about reopening next summer. this won't open next year in my opinion and if it does open in 2018 it will be at a snails pace. sorry for the typos, | granto2 | |
16/11/2016 18:28 | SAMARCO samarco is Ferrexpo's main competitor and only serious competitor that can match it for pricing, and so it is always worth writing about it. lets be real here, when it comes back into production it will seriously impact Ferrexpo. The Players there are lost of vested interests here, each with their own agendas and goals, some are in tandem and others not. -Samarco Mineracao= this JV 50/50 split between VALE and BHP Billiton owns the mine. it owes its Bondholders $2.2m and its Banks $1.4m and has agreed to pay a minimum of $1.8m to the Brazilian government in compensation for the dam burst disaster. It missed its last bond payment and clearly is screwed for cash. So that's $5.4Billion it needs to find to wash its face. when it was up and running it make $560m a year. I think it could make $700m to $800m annually, however upgrades, environmental costs etc, and it appears clear that the day this company clears its debts to one and all is a long way off……whi -Vale and BHP Billiton= as joint owners, there have a legal barrier, of sorts, but not a moral one, and if it is proven that their executives really did know things, then they too could be on the tab for Billions. They have already offered $6billion. I'm not sure of that would be a loan to Samarco but it could be. either way, while both companies would like the mine reopened to start generating money they will want assurances that all is settled and in place and the legalities sorted. easier said than done, with environmental officers withholding licenses, mining ministry powers, bondholders fuming and gone legal, national lawsuits, regional law suits, and wild cat class action lawsuits.Both companies have hinted that unless the Brazlian authorities play ball fairly the mine may not reopen. Given the debts of $5.4billion both Vale and BHP could hardly be relishing all this hard work and no return of investment for many years into the future. The truth is they are no pushed either way. recent lawsuits against their executives in Samarco will have added fear here. I expect them to play a 'lets get the deal in writing before we reopen the mine'. and that deal will have to include the bondholders, and the banks, and the govt there. sounds like a lot of to-ing and fro-ing. Brazilian Govt=- they must be growing frustrated with the inaction here and several fines have emerged and note the police are beefing things up. I think they will try to squeeze the best deal possible here. with all the vested interests circling for a piece of the pie one wonders how long might it all take. But they will want to be seriously looked after or else. Bondholders- the bonds are currently at 35%, down from 39% weeks back. Lets look at the bonds. there is $5.6 BILLION owed here between government fines and bonds/banks/ This is a mine ONLY twice the size of Ferrexpo, and near identical costs. This would be like Ferrexpo owing $2.8billion, being half Samraco's size. Not to mention legal costs, and start up capex, So who is taking the hair cut? The govt? not a chance, they represented the people that died. so its the Bondholders. I suspect they will sit back and say, no deal until we see the annual profits. another excuse to delay things for the big two. lawyers lawyers love a long fight, they love to complicate things, delay things, drag it out, and bleed the money, and thankfully all sides here have plenty of cash to be milked. My Prediction I think BHP and VALE will fight amongst themselves and Vale will buy out BHP's share for little or nothing. with a Brazianian company in ownership the Govt we see all long term profits kept in Brazil and negotiations will be a little easier. The Bondholders will be told, 1 you take a haircut of 70%. or 2, we fold the company | granto2 | |
16/11/2016 17:43 | Giles. allow me copy and paste my replies in CAPS. I really appreciate your comments and have followed them for a long time. Only just started posting myself though. My main question to you would be to ask what you think of todays volatility, A SWING OF 10% DURING THE DAY IS NOT UNCOMMON AND IS JUST NORMAL EBB AND FLOW AND IS USUALLY NOT RELATED TO MARKET NEWS. TODAY IT TRACKED ORE PRICES. this news article that is floating about and whether that has any impact on your assessment of the company. I WAS AWARE OF IT FOR A WHILE. CLEARLY THIS PLACES A QUESTION MARK OVER THE CEO BUT I WOULD AWAIT THE OUTCOME OF THE INVESTIGATION BEFORE MAKING A RASH STATEMENT. Also I was wondering what you thought of Deutsche Bank's targets. INVESTMENT BANK'S TARGETS AND FORECASTS ARE OFTEN SET TO SERVE THEIR OWN AGENDA.REMEMBER THE PRICE IS WHAT SOMEONE IS WILLING TO PAY. SO YOU HAVE A MARKET PRICE AND A RECENT PLACING PRICE. TARGETS ARE A HONEY TRAP, A BIT LIKE LOOKING AT ANOTHER BOYS HOMEWORK ON THE WAY INTO SCHOOL. IT'S WORTH A PEEK BUT HAVE YOUR OWN HOMEWORK DONE. I don't understand why the analysts are so far apart with their assessments. AGENDAS. Plus there is the CCC rating just been given. S&P and MOODYS GAVE VERY DIFFERENT PROFIT FORECASTS. S AND P WERE THE BETTER OF THE TWO BUT I STILL THOUGHT THEY ARE ABOUT 15% BEHIND THE REAL EARNINGS HERE. MOODYS WAS SO FAR OUT I GAVE THEM THE BENEFIT OF THE DOUBT AND THINK IT WAS A MISPRINT AS ALL THEIR OTHER FIGURES WERE OK. TO SUGGEST FERREXPO WAS IN DANGER OF MISSING BOND/BANK REPAYMENTS MAKES NO SENSE. I wondered what you think of all this and whether you have been through similar as the share rose from 30p. I TEND TO KEEP MY EYE ON THE GAME AND NOT GET CAUGHT UP IN THE COMMENTATOR COMMENTS, READ THE RNS'S , LISTEN TO THE PRESENTATIONS, RESEARCH THE INTEREST, FOLLOW THE IRON ORE NEWS AND PRICES VIA GOOGLE SEARCH, THIS IS HOW I LEANR AND MAKE MY DECISIONS FROM THAT INFO. . Is this the normal daily news bombardment and volatility that we should expect as shareholders of Ferrexpo. I bought back around 90p, sold a few times and and really happy with the results so far. Im now back in today and looking for a long term hold. YOU ARE IN BELOW THE PLACING PRICE. SO THAT'S COMFORTING. THIBGS CAN AND WILL GO WRING IN MINING, SO EXPECT BUMPS ALONG THE WAY. | granto2 | |
16/11/2016 17:33 | Hi Again Giles a) I assume - perhaps wrongly - that you are responding to my post before yours. In which case I will just mention that I am not Granto. But it's very kind of you to mix me up with him!! ;-) b)I don't know whether the "news" is false (the PGO action appears to be for real) but the interpretation/spin/ | jjhbev | |
16/11/2016 17:11 | This is why you are such a legend Granto. Investors should follow you closely. You always give factual, unbiased and honest answers, that are incredibly well informed. So, in a nutshell it seems that the internet has been intentionally flooded with false innuendo, rumour, and negative News about FXPO all designed to give retail investors the fear and trigger stop losses. What a complete con! Looking forward to those end of year results. | gilesgraves | |
16/11/2016 16:17 | Hi Giles Even for Fxpo this is an unusual day on the bulletin boards. IMO it’s almost as though there has been an active effort to create something here Looking at various articles posted elsewhere today there is 1 An Interfax article about the PGO soliciting for the arrest of the ex chairman of Finance & Credit. This person is named in the article as Volodimir Khylvniuk 2 A UKropnews article on the same story refers to the ex Chairman and his deputy being one Demchenko Aleksandr Ivanovich. This person is quoted as being “a former assistant of people’s Deputy of Ukraine Konstantin Zhevago” 3 A posting from something called True-News which, when I open it up, shows a posting date of Tuesday, August 9th, 2016 in the upper left of the article 4 There appear to be people indicating that Zhevago is the subject of the PGO action. I fail to see where this is stated. As far as I can see this is not the case. 5 A posting of an Interfax article dated 17th October referencing the S&P rating. This is old news and has been discussed here and elsewhere previously with mostly negative comments re S&P and its rating assessment from early in the summer. If one reads the article one can see that the S&P comments are way out of date and refer to risks associated to iron ore price downside risks, e.g a price for the rest of 2016 of $50/tonne and reduction to $45 per ton for 2017, Samarco restarting etc. etc. To be fair to S&P, they did state that “if existing iron ore prices and pellet premiums persist, or if the hryvnia experiences sharp depreciation, the company should be able to fully cover its upcoming maturities from operating cash flows," Iron ore at the time was $55 per ton and looked like trending down. As we all know iron ore has in fact moved from the upper $50s into the $60s and recently into the $70s. At the same time premiums appear to have increased. Cash generation (EBITDA) is probably on track for as much as $250m as compared with the $160m in the first half. As I write, we have less than 7 weeks till the end of the year. Why therefore are these S&P comments from early summer relevant & why publish/re-publish now? Certainly – and IMO sadly – since these postings have started doing the rounds there appears to have been a marked impact on the share price with what looks like a lot of PI selling. Fxpo is by no means risk free and everyone is perfectly free to make their own investment choices – but personally I feel that the “news” in the postings referred to above is no basis for investing or selling here. Each to their own! | jjhbev | |
16/11/2016 15:22 | Thank you Granto, I really appreciate your comments and have followed them for a long time. Only just started posting myself though. My main question to you would be to ask what you think of todays volatility, this news article that is floating about and whether that has any impact on your assessment of the company. Also I was wondering what you thought of Deutsche Bank's targets. I don't understand why the analysts are so far apart with their assessments. Plus there is the CCC rating just been given. I wondered what you think of all this and whether you have been through similar as the share rose from 30p. Is this the normal daily news bombardment and volatility that we should expect as shareholders of Ferrexpo. I bought back around 90p, sold a few times and and really happy with the results so far. Im now back in today and looking for a long term hold. | gilesgraves | |
16/11/2016 15:03 | In terms of the SP, I valued it here at £1.25p a few years ago, I retain that price estimate. | granto2 | |
16/11/2016 14:55 | Hi Giles. I'm not sure what you would like me to comment on other than the general satiate of affairs. I believe that Ferrexpo is performing better than expected based on the all the available information out there. The pellet market is buoyant and I expect Ferrexpo to announce a very strong end of year accounts. | granto2 | |
16/11/2016 14:43 | I telephoned Ferrexpo just now. They did not know about this news story. | gilesgraves |
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