Ann: Trading Halt, page-26

Overall I was a bit disappointed in H2.

Millners report in the AR was fairly political but a good read.

If we exclude the non regular items and ignore the non coal parts of the business.

EBITDA of 232 for 6.4MT means they earnt 36mil for every MT at a Coal price of about ~75USD/T

In H1 EBITDA was 285 for 4.5MT which means they earnt 63mil for every MT at a coal price of ~100USD/T

So if we assume 8MT from NSW next year and coal prices stable then the earnings from NSW will be about 288mil for the year.

So the big variables here are coal price and QLD coal production.
I suspect NAC will produce another 3-4MT next year. What do others think?

So if we assume NAC at 4 and NSW at 8 and current coal price (they mentioned coal prices have stabilised) then we get 12 x H2 margins = EBITDA of ~ 432 vs EBITDA of 517 this year.

EV is 2.3 bil so EV/EBITDA of 5ish.

But if we exclude QLD and assume NAC finishes then we only have 8MT = EBITDA of 288 and therefore EV/EBITDA of 8 (which still isn't bad).

So then the biggest variable (and unless one is shorting other coal stocks to remove Beta), is coal price.

If the coal price sinks much further all margins will be wiped out.

So this forces holders to have a view on coal prices in the short to medium term. I'm a coal bull so I think it'll go up again, but there are good arguments against that.