New World Res A Share Discussion Threads

[rutty74] 24/8/2009 07:31

August 24, 2009

Corus to reforge Welsh steel plant

Arcelor begins to relight fires at blast furnaces from Ohio to Ukraine as a steelworks at Llanwern comes back to life

Carl Mortished, World Business Editor

Corus is preparing to bring a steelworks at Llanwern in South Wales back to life as ArcelorMittal, the world's biggest steelmaker, begins to relight fires at blast furnaces from Ohio to Ukraine.

ArcelorMittal will restore operations at a furnace in Gijón, Spain, this week, while two idle steel plants in America - a blast furnace in Indiana and a blast furnace and a rolling mill in Cleveland - will be brought online over the next two months.

[rochdae] 21/8/2009 17:27

The results are pretty meaningless imo. If we're set for a recovery in Europe then NWR are going to start selling more and prices will rise. If the market sniffs a recovery then we go up, just as when it sniffed a recession we tanked even though headline profits were great.

I'm not an expert on coal and the competition by the way. I just follow were the money is going in or out...

[dawsonpaul] 21/8/2009 14:54

This stock is like one of those blow up things that you buy for the kids. No matter how hard they keep punching it, the thing just keeps bouncing back.

[robseaton] 20/8/2009 16:05

I'm surpised the share has rebounded back to what it was the day before the results. They weren't great reading. I'm still bullish on this stock, but can't see why it has come back so strongly yesterday and today.

[p bear] 20/8/2009 15:37

Sorry david as bullish as I am that is not going to happen, did you actually read the results? These guys still are losing money.

[david adams] 20/8/2009 14:22

very upbeat presentation and now upgrades coming through. C u at a tenner next few weeks.

[adieadie] 20/8/2009 13:02

The problem is taht these steel producers are not buying the level of volume that requires the likes of NWR.

[seible] 20/8/2009 11:31

Good news from one of the key customers:

[adieadie] 20/8/2009 11:18

Agree with BottomPicker and also have a feeling there's a few more big bumps to get over before we see recovery.

[future financier] 20/8/2009 10:28

Been in this awhile - time to bank a nice 50% profit.

Hope to see you all again soon ............

[p bear] 20/8/2009 09:19

The Liberum mining team

New World Resources: A collapse in earnings and volumes and a cautious outlook

New World's H1 results reflected a difficult first half for the company, heavily impacted by the drop off in regional demand and its inability to sell beyond is captive domestic market. H1 EBITDA was slightly short of consensus (€82m vs. €87.4m), and magnified further at the bottom line- €45m vs consensus of €25m loss. The key issue has been coking coal and coke sales, down 29% and 53% YoY, despite customers having contracted prices and tonnages, reflecting the weak position of many of NWR's customers who simply couldn't afford to take more material during the period.



The company made some improvement in mining cash costs (down 16% excluding FX impact), although given the lower volumes, on a unit basis mining cash costs per-tonne actually increased 8% (excluding FX) and coke cash costs per tonne increased 109%.



Outlook commentary remained cautious. The company noted that its core customer markets are beginning to show "some" signs of recovery, but management are uncertain as to weather the increase in demand was a result of restocking or improved end demand. Clearly any recovery in Eastern European steel production is lagging Asia, and potentially faces more headwinds.



While earnings momentum and conditions in regional steel demand appear to be moving in the right direction, New World shares have doubled since the beginning of July which looks aggressive given its €620m net debt position (annualised net debt to EBITDA 3.9x vs. covenant of 3.25x), additional capex requirements (another €85m expected in H2) and reliance on a recovery in Eastern European steel demand. In addition, improving coking and thermal coal prices in H2 will not have an impact on earnings (except through coke sales) as all coal sales are done on contract. With the shares trading on c.6.0x consensus EBITDA in 2010, the valuation looks more than up with events compared to lower risk and more liquid peers on similar ratings such as RIO and XTA. One for the die hard European steel bulls only.

[bottompicker] 20/8/2009 09:13

If we see a low volume day the MM's will drop this like a stone. But as we have seen for about a month now, there is aggressive buying in this share, so if the price drops perhaps they will buy more.

China rallied today after loosing almost 20% in two weeks, what happens next is all about confidence in the recovery.

[adieadie] 20/8/2009 07:08

In a way I agree, but the following concerned me:

NWR said steel producers in the Central European market have favoured their own coking coal plants, leading local coke producers to partly or entirely halt production, causing a large increase in coke stocks in the region to cloud the long-term outlook for coking coal and coke flows in the region.

[adieadie] 19/8/2009 18:21

took a nice profit and bailed.

[pmeldrum] 19/8/2009 18:09

Still holding , plenty more to come i think as a recovery stock

[bottompicker] 19/8/2009 16:11

this is like the terminator, it keeps coming back

[rawboy] 19/8/2009 15:33

anyone any idea what they expect to get from energy business which is up for sale as i cant seem to find it from results

[mustau] 19/8/2009 15:27

Bid rumour should start circulating hopefully.

[rawboy] 19/8/2009 15:22

still in from £2.50 and have no intention of selling yet......just the begining

[mustau] 19/8/2009 15:18

Taken some off but been in since £2.50

[dizzylizzy2] 19/8/2009 12:10

anyone here still holding? seems everyone else is bailing out, I'm holding but feel a wee bit stupid. any thoughts here?

[rutty74] 19/8/2009 08:36

offers zilch confidence, i've had a great run on these and i'm out, good luck.

[leedskier] 19/8/2009 08:29

I am invested here and read it carefully. Rather downbeat I thought.