Hydrodec Share Discussion Threads

[1gw] 16/3/2016 12:09

Ouch - nasty downwards lurch just there.

[capricious] 15/3/2016 22:41

Everything is possible but the problem I see in saying Mr Black is going to take this private on the cheap, is that over the years he's had many opportunities to pick Hydrodec up for nothing, by simply removing any further funding lines. Seems a little strange to offer two new loans, although it does give him a lien on certain assets.

[luminoso] 15/3/2016 15:31

That's possible IF they make a thumping loss on their US business as well now.
Notwithstanding the oil price fluctuations, that possibility is no where near a certainty.

[luminoso] 12/3/2016 11:00

Capricious, you are right. This is indeed a well run but unlucky company. The Oil price shenanigans have ripped its plans to pieces. I am still watching from the sidelines but wondering if there is still decent upside from here just from the US operation alone. The UK disposal rns probably still has some rinsing of the share price left in it, but must look attractive soon, albeit with less potential upside than a couple of years ago.

[chorister] 10/3/2016 09:44

You're right - it's the effort of humping all that product out of Canton - their legs are knackered.

[kendonagasaki] 10/3/2016 09:31

Looks like they are on there last legs here IMO.

[capricious] 10/3/2016 08:18

The good thing about having such a significant increase in output, apart from the obvious, is that they become slightly more insulated against the volatility of oil, with turn around being shorter, i.e not sitting in storage etc

[capricious] 10/3/2016 08:03

Rough (personal) estimates

Feb 2.44ml = (using lower bound margin 20c) around $490k
Daily shipment record 378000litres = around $76k


Blinking good if you ask me!

[capricious] 10/3/2016 07:58

I don't know if the timing was planned as I had suspected they were holding some positive news after the bad but its very welcome indeed.


Underlines the potential in the US.

[capricious] 08/3/2016 16:00

Yes you're right, future growth has been hit badly with the removal of the potential UK project, unfortunately that's all it was, strip out that positive and it was a loss making business that may have started it's decline long before the oil price crash. With the crash it did not make it possible to hold out until any new plant was built. It's a real bummer, because the business case was a strong one, hence why Mr Black is taking it forward. 10% royalties isn't a lot to show for all the work/money but if the project does happen, it would be a significant revenue stream over the years.


The problem with the HUK contribution, wasn't it mostly accounting gains, and in reality for 2015 it was a massive drag to the tune of 3 million EBITDA loss? Plus there was no real production at Canton during this period. From what Canaccord have suggested, is a potential for the US business to generate $500k/month with upside to $1m/month by year end. There is also plenty of expansion possibility, it's just not as ambitious.

I've posted long time back that the transformer market was having a Renaissance, especially for high quality products. Of course all this needs hard work, actual delivery of expectations and some good luck for a change. You're even more right about the jinx, seriously, I've never come across a more unlucky company, just when things looked set to take off.

[kattatogaru] 08/3/2016 15:18

I guess we are to expect another less-than-stellar preliminary results for 2015 sometime in March. We heard a lot of good news on Canton in the latter 1/2 of the year with successful commissioning of the rebuilt facility (after glitches) and delivery on the efficiency savings of the improved process trains... however with 2/3 of income coming from the UK operations in the previous year 2014, with the sale of HUK we're surely looking at a serious impact on future growth trajectory. I'm wondering if they're going to throw the kitchen sink at it (again!!!) in the hope of clearing all the bad news in one go - in which case, expect another sharp drop in share price .. not that there can be many holders left. I just hope that a smaller co. can focus on its key strengths and ride out the oil price slump. Seems this company is just jinxed - shame because the underlying tech is compelling. Good luck to Chris Ellis and GLA.

[capricious] 08/3/2016 09:55

Good posts yump.


You were right that the MMs were doing somthing. Pretty smart really, they must've got wind of what's about to be announced, then play around with the spread, generate transactions and allow the share price to rise on very small volume... just in time to be able to make margin on the way down.

[yump] 08/3/2016 09:20

Disposal of UK business has at least been quick.

If this was a large corporate energy supplier and had axed an entire arm of its business that was a heavy loss-maker, in order to concentrate on growth areas, the analysts would be quite pleased.

[yump] 08/3/2016 09:18

There are two types of poster I ignore:

The ones who post the 'everything must be fine' because the share price has risen a lot and the ones who post 'everything is tanking' because the share price has dropped a lot.

Both of those rely on looking credible because the share price appears to support their view. Usually the views have nothing of substance in them.

The exception being people who obviously hold and have some knowledge - not difficult to spot as their posts usually contain reasoning.

[capricious] 07/3/2016 16:18

Ignore him, the numpty is trolling again.

[kendonagasaki] 07/3/2016 14:49

It's just the start of the collapse IMO Mr Black will be buying out the USA operation in due course for peanuts.Sell.

[1gw] 07/3/2016 14:08

Canaccord retain "Buy" but reduce price target from 10p to 6.5p.

[chorister] 07/3/2016 09:14

Mortimer7, 1gw - strictly speaking you are both of course correct. However the key thing I think is the reiteration of the comment about a profitable 2016, which must refer to Canton and Australia and is IMHO very encouraging whatever the adjustments to the bottom line. And HYR will also gain from the $/£ exchange rate, at least to the extent that any costs are in £s (although they report in US$).

[1gw] 07/3/2016 09:09

chorister - well maybe they just mean that the improvement in cashflow as a result of the release of working capital reduces interest costs enough, or allows them to do other stuff with the cash, to deliver "profitable trading" in 2016.

On "profitability" I note they retain the "driving the company to a profitable 2016" wording, but also talk about "profitable trading". So are they talking about "underlying operating profitability" rather than anything closer to the bottom line?

[mortimer7] 07/3/2016 08:52

There will be a large loss to take as an exceptional item in the P&L acct for the write off of the UK related assets.
Reluctantly, I suppose this disposal is sensible strategy to preserve cash, but Andrew Black obviously still believes in the UK projects, so it seems a shame HYR are now not going to be able to see these through.

[chorister] 07/3/2016 08:06

Assuming no jiggery pokery with the numbers, working capital changes affect the balance sheet ie capital, not the profitability.