Opg Power Ventures Share Discussion Threads

[the original goldbug] 14/7/2023 19:22

It’s been a perennial worry that Tangedco welch on the contracts and they never have.

It is my understanding is that the federal government has tightened up the creditor days so power producers can keep on producing.

[tim000] 14/7/2023 18:32

Florence was worried that the Tangedco trade receivables might not be fully honoured and might be impaired. Apparently OPG secure full payment via a bank guarantee/ letter of credit.

[tim000] 14/7/2023 17:54

Indonesian coal is priced in $, so OPG has to hedge exchange rate risk, adding to cost. Plus shipping costs. And imported coal is more expensive. if OPG can source most of their coal via e auction, their costs will fall dramatically - and quickly too.

[tim000] 14/7/2023 17:46

google steelmint CIL to raise coal sales via e auctions by 80% 5 jul 2023 (Won't let me post a link.)

In case I haven't posted this article before, it's very bullish for OPG: forecast domestic e-auction coal prices are falling sharply while supplies increase dramatically. Consistent with the bullish tone of the latest update.

For example, e auction coal prices averaged R4840/t in FY 2023 and are forecast to fall to R2550/t this year, following an outturn of R2950/t in Apr-June.

[dave4545] 14/7/2023 13:49

3 monitors this is the only blue if you can call it blue.

Easily the worst bear market for small caps I have ever seen

[tim000] 14/7/2023 12:40

Since writing off the Gujarat assets, OPG has reduced gross debt from £93.5mn at March 2018 to c£20mn currently. That’s despite the impact of covid and the coal price spike impacting PLF and cash flow for most of the period. It doesn’t seem unreasonable that in the next 5 years, cash flow will be higher, especially given Goldbug’s view that profitability needs to be higher to incentivise investment in additional capacity. (And interest payments will be much lower too.) Most of future OPG cash flow should be returned to shareholders, with only £20 mn needed to repay debt.

[tim000] 14/7/2023 12:11

Patience. There are no rampers of the stock to give it momentum ahead of results. If the Directors are serious about enhancing shareholder value, reinstating a dividend and starting a buyback programme should not be too far away. The company now has a strong balance sheet and hopefully cash flow is improving due to the sharp fall in coal prices.

[bubbabubbabubba] 14/7/2023 11:40

Looking back now I wish I was able to invest in the NCDs Would probably have made more money definitely learnt so much invested in this company its like achieving a degree in financial analyst on the AIM problem is you don't get a degree and you could potentially make no money

[tim000] 12/7/2023 09:51

Do any readers here understand “deemed units”? The company always states generation figures including deemed units, even though it appears that deemed units don’t generate any revenues. If not, I’ll probably contact OPG’s PR company Tavistock and see if they will pass on my query to the FD. I’d like to make some sort of connection. I might even go to the AGM.

[tim000] 12/7/2023 08:40

The Coal Ministry publishes monthly data for coal-fired power generation volumes. Nationwide volumes declined 0.2% mom in May and 2.2% in June. Applying those percentages to OPG’s April PLF gives an estimated PLF of 74.0% in Q2. These figures make a nonsense of the Cenkos forecast for FY24.

[tim000] 11/7/2023 16:03

Coalmint: CIL coal production increased from 51.5 mnt in June 2022 to 58 mnt in June 2023. By contrast, thermal coal imports declined by 33% over the same period, as gencos substituted domestic for imported coal.

[tim000] 10/7/2023 07:52

For info, historically coal has been sold in India mostly through Fuel Supply Agreements (FSAs) which are longer term fixed price contracts, with residual production sold at higher, market prices via third party e auctions. Coal India is currently establishing its own in-house auction website, which should substantially increase the liquidity of e auctions. Hard to say how that will impact prices, but it should reduce transaction costs and improve availability of domestic coal. Freight costs and pricing should both be significantly lower for domestic coal, so hopefully OPG will transition to sourcing most or its coal from CIL.

[tim000] 10/7/2023 07:30

ICI4 price up slightly to $52.88/t this week.

[tim000] 07/7/2023 12:26

The Update stated that the company had repaid its entire project debt in FY23, some of which had a maturity date of June 2024. The bse figures suggest some refinancing has occurred, paying off some of the existing debt with new bank loans to extend the maturity date. The Update suggests the company now has a comfortable debt profile over the next 5 years (probably about £20mn in total), so management can now focus on enhancing shareholder value. Assuming that is true, it should be accompanied with something tangible in the Annual Report - buybacks and/or reinstatement of a dividend. And given a profitable H1 this FY plus the monetisation of its end-year trade receivables, the company should have plenty of cash to do this. Let’s hope they do something meaningful that changes investor perceptions of the business.

[tim000] 05/7/2023 19:47

Today’s coalmint article states that CIL e auction prices averaged R2950/t in calendar Q2, compared with an average of R4841/t in FY2023. The article forecasts average prices of R2550/t in FY2024. An earlier article forecast auction prices of R2000/t in FY2025. Those are substantial reductions compared with OPG’s R7811/t (including freight charges etc) in FY2023.

[tim000] 05/7/2023 08:52

CIL is listed but is majority government owned and is the largest coal producer in the world. It’s clear that the government has directed CIL to flood the domestic market with production, both to ensure adequate and cheap power supply for a rapidly growing economy and rising household living standards, and to substitute cheap domestic coal for more expensive imports. Thermal coal prices should continue to fall in FY 2024.

[tim000] 05/7/2023 07:31

Good article today on Coalmint, re CIL ramping up e auction sales this FY, with consequent downward pressure on thermal coal prices.

[tim000] 04/7/2023 08:49

Coal India produced over 175mn tonnes in calendar Q2, up 10% y-o-y and a quarterly record. CIL forecasts producing 780mn tonnes in the current FY. OPG thus should be able to substitute a lot of cheaper domestic coal for its imported Indonesian coal. This large increase in domestic production will also put significant downward pressure on prices, as reflected in the sharp fall in premiums over notified prices since April.

[tim000] 03/7/2023 09:08

ICI4 spot edged lower again to $51.32/t this week. I believe that’s the lowest since April 2021.

[tim000] 03/7/2023 08:39

We can’t work out the net debt figures from bse, as those accounts don’t show which liquid assets are included in the net debt calculations. But we do know gross debt has fallen sharply post the £20mn NCD repayment, and we could easily be strongly net cash now.

[dave4545] 03/7/2023 08:13

These full offer trades are strange. Not in auction.

Online is 8.375-8.7p for 50k quotes so not sure what all these full 9p trades are and all the mm's are just on stalemate still all 8-9p refusing to make the first move but making small profits from the weekly 2 way trade in this one.

[tim000] 01/7/2023 10:16

India has high thermal coal inventories to protect against shortages this year

[tim000] 30/6/2023 20:36

Hard to say how useful this is….The Tangedco website has revised tariffs effective 1/7/23. The tariff per kWh for industrial customers is at least R6.90. That is about 20% higher than OPG’s average tariff in FY22, when PLF was just 52% and average landed cost of coal was cR5460/t. OPG should be able to improve on both those metrics this year, providing some evidence for a profitable year. (EBITDA was c£21mn in FY22.)

[tim000] 30/6/2023 15:01

Yes, understood. Electricity consumption is growing rapidly and supply capacity is not keeping up. The Indian government is looking at managing demand by increasing tariffs by 10-20% at night time (when there is no solar power available) and reducing tariffs by the same percentage during the day. Ideal situation for generators: tight market for outputs and loosening market for inputs.