Opg Power Ventures Share Discussion Threads

[dave4545] 20/6/2023 19:36

Thanks for your posts tim.

This market is on it's knees, worst I have ever seen. I had another stock suspended today, I have so much money suspended that is not certain to ever return I had to take action and reduce my holding so some of the selling today was mine, not because of what OPG said but because I've lost a bundle recently and I have nearly all my eggs % wise in the OPG basket and I cannot afford to take the risk.

After 30 years of trading it feels like game over for me. Made a lot of money out of this game but it's just a younger person's trading frenzy now, people jumping in and out for £20 profit s not my cup of tea.

I'd rather leave a smaller holding here long term for a much bigger % return than a large holding looking for 50-100%

Pretty deflated but accepted the situation

[tim000] 20/6/2023 18:58

I’ve been given access to the Cenkos update now. Although they forecast a very low PLF and PAT in the current FY, free cashflow is over £30mn due to the unwinding of last year’s receivables explosion. They say $55/t for coal is still too high and stops a higher PLF, however the authorities require OPG to produce at about 75% PLF for H1FY24 and will pay enough to make a profit.

[tim000] 20/6/2023 18:14

The RNS figures are consistent with my earlier view that after end-September OPG will have about £13mn outstanding debt, which the RNS states has various maturities over the next five years. So only about £2-3mn debt repayments on average per annum, meaning the large majority of future cashflow will be available for “enhancing shareholder value”.

[tim000] 20/6/2023 15:06

The Cenkos FY24 forecast figures stated on LSE (namely only a small positive cashflow) surely don’t make sense. As I understand it, Tangedco has the right to procure surplus power generation from OPG, but OPG can presumably supply its existing industrial customers at very good margins given normal coal prices. FY2024 should be very profitable.

[tim000] 20/6/2023 11:40

Annual averages in the RNS are respectively 1.5 bn units, 42.1% and R8.71.

[tim000] 20/6/2023 11:37

I estimate from the figures in the RNS and the H1 results that, comparing H1 to H2, power generation (incl deemed units) doubled from 487 MUe to c1000 MUe; PLF increased from 26.8% to 55.0%; and average tariff declined from R9.14 to R8.50. Note 2023 cal Q1 was roughly 80% of the H2 figures for revenues, etc.

[the original goldbug] 20/6/2023 11:16

It just goes to show what a dysfunctional market we are in.

It’s not just affecting orphaned small caps. Major blue chips trade at busted discounts while mega tech literally grows to the sky.

[tim000] 20/6/2023 11:15

It’s a value share for a reason - as yet completely overlooked. Cenkos has issued an updated research note today but it’s not available unless you are a paying client. They do have a buy recommendation, obviously.

[bubbabubbabubba] 20/6/2023 10:00

Everything looks so positive Higher PLF%Higher Revenue Higher ProbabilityNet-cash Position Still an amazing buying opportunityStill worth 30p or more

[dave4545] 20/6/2023 07:46

"With revenues , EBITDA and PAT in line with FY23 market expectations , the Company can now focus upon enhancing shareholder value."

Guess we already sort of knew this from the BSE statements but until they said this via a UK rns we did not get a reaction

All 3 mm's open have opened higher.

[tim000] 20/6/2023 07:36

At the moment at least, we are in a perfect storm of near-normal coal prices, bountiful coal supply, moderate freight costs, normal/above normal PLFs and record low indebtedness. Only tariffs are unknown.

[florence141414] 20/6/2023 07:28

When the PLF averaged 70+% in 2019 net profits were £15m. Coal prices would have been lower back then but so were tariffs. Assuming these two things more or less offset then we are in for a great year. Sounds like Dividends are being hinted at sooner rather than later too.

[tim000] 20/6/2023 07:17

Trading Update published. No surprises, but the report mentions the planned long term increase in domestic production of coal to reduce prices; OPG looking to increase purchases of domestic coal supplies; a strong recovery of PLF back to 75% in April; the known large debt repayments made recently; and future measures to enhance shareholder value - presumably reinstatement of dividends and possibly buybacks.

[dave4545] 19/6/2023 17:43

Was waiting at 16.29pm to see if a delayed buy showed up but they have done a 2 hour delay on a 158k buy at 9.478p from 15.05pm

Nice buy that, totally hit the limits, perhaps this time we can break 10p this week

[dave4545] 19/6/2023 10:49

Thanks Tim.

If somebody said a £35 mil market capped stock will do 150-200% today I could have been hopeful it was OPG on massive recovery news.

Sadly it was RCGH and of course it's done that on nothing and because it's so illiquid, £86 mil market cap and no reason at all for it .

60-100p spread and people pile, people paying 92p and one minute later others selling at 68p.

We are having to be very patient here, buyers at 9p but nobody willing to pay 9.19p current online offer.

[tim000] 19/6/2023 09:50

Dave, go to jwcindonesia.com for weekly ICI4 coal prices. Latest is c$52, down from $56 the previous week.

[dave4545] 19/6/2023 09:23

Bubba.

Is the coal price still dropping over far east because it's took another mini tumble on the chart in the link above over 5% down to another recent low.

Might explain the nibbles today.

[tim000] 17/6/2023 10:55

The other thing is that OPG doesn’t seem to have very good access to cheap domestic coal, although it has signed a small fixed-price, long-term contract for about 100k tonnes pa. Is that a geography issue, perhaps OPG is not located anywhere near coal mines?

[tim000] 17/6/2023 10:44

Goldbug, there are a couple of risks I see. One is an increase in coal prices if the market tightens, coupled with government policies that restrain tariffs to benefit the consumer. A bit like the O&G windfall taxes in the UK. The Indian government is already interfering in the power industry, as per my posts above. Long term, that doesn’t really affect the investment case as we agree profitability needs to be high to incentivise investment in new capacity. But my scenario would slow the recovery in margins.

[the original goldbug] 17/6/2023 10:13

Helpful analysis Tim - you understand the dynamic well.

I think there is the chance they grow the business given the current opportunities out there. The window on super distressed valuations will close shortly.

[tim000] 15/6/2023 15:48

The FY 2019 results state that at normal PLFs, annual coal consumption is about 1.7mn tonnes. So if coal prices were to fall by say $40/t in FY2024 compared with average levels the previous year, other things equal that would be a cost saving of c£53mn. Tariffs would also likely decline, but that shows how much impact coal prices can have on the business - more per annum than the current mkt cap.

[tim000] 14/6/2023 09:50

Historically, EBITDA has been about £35mn? With almost no debt next year and very little sustaining capex, that translates to at least £20mn FCF. Say half goes on dividends, that’s 2.5p per share. That seems a reasonable target for the next few years.

[dave4545] 14/6/2023 09:29

You cannot trade it, it's just been stuck at this level for months, there's unlimited rubbish out there for traders to play.

I always thought results day was a trading day, the mm's were always asleep to the potential and low PER.

Anyway I'll bow to your superior knowledge and say nothing until a update shows.

At least it looks good today 100k online is 9.98p