The company has made no forecast of what they expect for full year earnings for 05/06. However with 1.1cps posted in the first half and the directors saying they expect second half growth, i would imagine a full year figure of 2.5cps would be very realistic.
This puts the stock on a 2006FY earnings multiple of just 7.8.
The best growth is still to come in the 06/07FY though
Hay point expands throughput by 25% at the end of this year, and gladstone will have 30% extra capacity. Newcastle coal port expands by about 20% by the middle of 2007.
CHL gets paid per tonne for testing the coal which is exported through these ports. They are about to roll out an automation project which basically will mean very little in the way of extra costs will be added, when the company begins testing the higher levels of tonnage later this year.....very high profit margin on the extra revenue attracted by the higher export tonnages of coal!!
This company will be a star performer over coming years on the back of unprecedented demand and volume growth for both thermal and coking coal.
CHL Price at posting:
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