Those predicting or wanting to see Armageddon in the report are going to be bitterly disappointed. They will probably just harp on recovery rates being below forecast
No particular order - but underlying business at MT C you can see why the word "robust" was used, refer to cash reconciliation below
Notes
Guidance achieved and well up on last QTR,
string some more of these production numbers together instead of 4 on the slide and EBITDA of MT C will exceed last year, which was a poor year operationally but still managed close to 100M AUD.
if production recoveries further improves off a low base this will improve forward cashflows and EBITDA of Mt C.
Recoveries starting to improve but still way down of their target
March now seeing early signs of 200ktpa , guidance lifted for this QTR
cash Costs / ton falling nicely in the QTR, falling even more in the last month (margin expansion) Investment in YOP starting to pay off but still has huge potential to improve recoveries
shipping schedule was as agreed with clients, no offtakes walking away or major production problems forecast by many
string of operational difficulties / 4 QTrs CY2018, now showing clear signs of reversing with production back up to near first half 2018 averages off top of head.
SDV process closed, still talking to shortlist but not accepting short term offers to appease short term views. MT C robust cashflows will clearly help with forward funding needs, no hurry
Zero Debt, 285M USD, approx. 395M AUD cash on hand. Pfffft I hear some say, ok, stick with me
Production well up on last QTr and back to first half 2018 levels but the recoveries whilst well up on last QTR are still 50 %ish ,
that's crap I hear...…
OK I agree, so does the management and there are already further improvements this month but still way way way off 70% that they want - agreed
Forget for a moment that after a year of really bad production and recoveries that the business still managed to generate positive cashflow from operations in 2018 and an EBITDA of close to 100M AUD despite even lower recoveries than last QTR or at present - forget that fact
So last QTR, recoveries are still way below 70%, - agreed
with such poor recoveries and only one shipment of 15000 T.... lets look at the cash
Using a rate of 72 cents USD Vs AUD
Cash at end of Year 24.775M USD
Add Cash from POSCO deal 262.8M
net of turnover tax (8.8M) and corporate tax instalment paid (8.4M)
Total Cash 287.57M USD
Add production Sales of ONLY 15000T in the last QTR
Less Cash and corporate costs paid during QTR
Closing cash balance 285.3M USD
hardly a difference despite ONLY ONE SHIPMENT, despite only achieving 50 % recoveries well off their planned target....
To have the net cash position barely change after a QTR of poor recoveries and only one shipment shows real strength and agree with the statements in the report regarding underlying cashflow of Mt C business (now wonder the word ROBUST is used)
Amazing to think the net cash balance has barely changed with only one shipment and such poor recoveries VS target
Anyway , good luck
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