Nailed it goofy, can only add that there were T4 commissioning...

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ausheds

19,577 Posts.

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01/08/16

11:28

Post #: 18415090
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Originally posted by goofy ↑

Current debt is Mt K US$225m at an interest rate of 2.75%pa and JARE US$203m at an interest rate of 5.7%pa.
At todays exchange rate that’s a total of around A$23,632,951/pa.

Looking at Lynas Q2 2016 results the company was marginally cash flow positive of A$900k.
A$7.2m worth of production was delivered to customers during the quarter at no cost (was pre-paid in Q1 2016) and sales invoices for the period totalled A$55.9m compared to receipts of A$50.7m.

That’s an additional A$12.4m of revenue that theoretically could be included in the Q2 2016 cash flow report and that’s at only 90% production capacity with recoveries still not at optimum levels.
So looking forward there is a potential for the company to be cash flow positive to the tune of A$12.4m per quarter or around A$50m/pa at only 90% capacity which is ample cash flow to cover interest payments and service the principle debt also IMO.

No interest payments are due until end of December 2016 without additional interest or penalty and the US$2m principal payment, that was paid by using funds from the restricted JARE interest account, also does not have to be repaid until end Dec 2016 without additional interest or penalty.

Lynas has been given plenty of time by its lenders to prove it is a viable business and it looks to me the company is well on its way to achieving that regardless of how much garbage one poster can regurgitate on a daily basis to the contrary.

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Nailed it goofy, can only add that there were T4 commissioning costs taken in Q4 that won't be ongoing in subsequent Q.

Despite some relatively minor expenditure on removing bottlenecks H2 should start to provide a much clearer picture of potential.

LYC Price at posting: 7.2¢ Sentiment: Buy Disclosure: Held
8 Upvote

0 Great analysis

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