Opg Power Ventures Share Discussion Threads

[tim000] 30/7/2023 22:02

CIL notified prices for thermal coal with the same GCV as ICI4 increased from R1150/t to R1240/t on 31/5/23. A Coalmint article mentioned that the e auction premium over notified prices had fallen to 55% in mid June. That suggests a run of mine price of ca R1920/t, pre-taxes and freight, equivalent to ca US$23.50/t. Even with all add-ons, that’s substantially less than costs of Indonesian imported coal and would yield a massive improvement in margins compared with FY23.

[tim000] 30/7/2023 05:56

CIL increased coal prices by 8% effective 31/5/23, which will be reflected in the June NCI available shortly. But note that largely affects FSAs, which OPG mostly don’t have. We already know that auction prices and import prices continued to fall sharply in June.

The timing of the CEO’s share purchases is interesting, it coincides with the release of the excellent NCI figures. That might not be a coincidence. The CEO of course would know what price the business is paying for its coal, but she might not want to take advantage of inside information. Unlike most AIM managements, OPG’s Directors are on very low salary packages. When Gupta was chairman he refused any remuneration at all. I respect that attitude towards shareholders.

[tim000] 29/7/2023 21:24

The 2023 Annual Report seems to be published on the same day as the final results RNS, likely end-September, my comment was based on p17 of the 2022 AR.

The latest management share purchase was in an after hours (5pm) RNS Friday.

[the original goldbug] 29/7/2023 20:31

Is the 2023 annual report out yet?

I don’t see anything on their website!

Where are you seeing management share purchase announcements please?

[tim000] 29/7/2023 05:58

One obvious answer is that slow accumulation steadily reduces the future cost of taking the business private, which could be financed out of cashflow quite quickly (even at a good premium to the current share price) unless the share price recovers substantially. The latter though looks likely. Another is simply that the CEO knows the prospective dividend yield is very high. I know the Gupta family members are a concert party, but the CEO herself might have a very small shareholding and wants to increase it.

[dave4545] 29/7/2023 00:47

Does make you wonder when somebody holding over 200 million shares suddenly thinks it's worth while buying another 75000

[tim000] 28/7/2023 19:51

The Indian government is currently looking to expand the private coalmining sector by licensing new mines. On rereading the last Annual Report, I noticed a footnote that said OPG was actively looking at participating in these licences. Apparently the initiative is struggling to gain traction as banks are unwilling to fund new coal mines. But should anything come of this, a vertically integrated operation would certainly offer insurance against coal price volatility.

[tim000] 28/7/2023 17:51

Maybe the 220k purchase today was also by an insider?

[tim000] 28/7/2023 17:44

Every little helps. I’ve been buying more myself in the last few weeks.

[bubbabubbabubba] 28/7/2023 17:24

Ceo buying shares!!! Maybe tax reasons

[dave4545] 28/7/2023 14:09

220k buy at 9.4p when 9p offer

No wonder the mm is sitting on 9p bid buying up all the little sales

3 v 1 too on L2

[tim000] 28/7/2023 10:37

No doubt some people will trade the rise. However, imho this really is a long term hold. All factors point to a long term re-rate of the share price: sharply increasing domestic coal output to guarantee cheap energy prices; sharply increasing energy demand; Goldbug’s thesis of chronic under investment in new power generation capacity; and a ca 75-80% share price discount to book value of the company’s net assets. And this for a business with strong cashflow and now very low debt.

[tim000] 28/7/2023 10:29

I’ve started posting on LSE. I mentioned there that the primary source of domestic thermal coal for OPG is e-auction. The National Coal Index calculates weighted average prices from FSAs, e-auctions and imports. As the swing supplier, e auction prices are far more volatile than either FSAs or imports. With excess supply in the current market, the price premium over FSA prices paid in auctions is collapsing - down from 137% in April to 55% in mid-June according to Coalmint. That obviously bodes well for OPG, assuming they are actively participating in CIL auctions.

[dave4545] 28/7/2023 10:17

Big moves on L2 and full 9.5p wanted online possibly a delayed buy or two in the system ?

[tim000] 27/7/2023 11:52

No sign of any selling yesterday or today, so buyers now paying full price. Hopefully the share price will renew its upward recovery now.

[tim000] 27/7/2023 10:58

NCI figures now published for May. Including both imported, and domestically produced, non-coking coal, prices were down nearly 7% in the month to May, and were down one third in the 12 months to May.

[tim000] 22/7/2023 09:36

Economic Times of India: coal production up 8.5% in Apr-June compared with a year ago; coal imports up nearly 17% on a year earlier in Apr-May due to a 60% decline in prices. As a result of this surge in domestic output and imports, coal stocks were up nearly 38% on a year earlier at end-June. There have been no official releases of coal price data for India since data for April, the national coal price index for May and June should be released in early August. It’s hard to see though that there hasn’t been a dramatic change in OPG’s PLF, profit margins and cashflow. The cost of a 1p annual dividend (yield about 12%) is a tiny £4mn. Even Cenkos is forecasting EBITDA in FY23 of about £14mn.

[tim000] 18/7/2023 15:32

The interesting question is just how quickly, and to what extent, OPG can substitute domestic for imported coal. This is clearly the intention, given the authorities have announced a sustained jump in production, targeted at helping gencos. My guess is that the massive increase in e auction sales already started means cheap domestic thermal coal should be readily available.

[tim000] 18/7/2023 15:27

The planned hikes in Indian coal production and e auction sales over the next few years means market prices faced by OPG are very likely on a marked downward trend. Margins could easily return to historical levels over the rest of the FY.

[bubbabubbabubba] 18/7/2023 14:45

15p a share probably fair value at current coal prices

[bubbabubbabubba] 18/7/2023 14:44

Coal prices 2 year low in india

[tim000] 17/7/2023 17:27

ICI4 $52.47 this week

[the original goldbug] 14/7/2023 19:59

Pretty much

[tim000] 14/7/2023 19:29

I believe the supply agreement with Tangedco has six years to run. Presumably it will then be extended. Contracted supplies to Tangedco and their regional counterparts is presumably the way the authorities control the national grid and avoid power cuts.

[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.