I'll have a crack, starting with what believe are arereasonable assumptions and a few facts;
- Calculations are for the coming 12 months, not 2022FY
- US/AUD$ at - 75 cents
- Carried forward income losses - AUD$251mill
- Production from Pilgan plant 360kt, all under term contacts
- Production from Ngungaju plant 160kt, all sold on BMX
- Spod term contract prices average AUD$1,608pt
- Spod spot price achieved average AUD$2,144pt
- Operating-Cost of sales pt - AUD$525, based on spod sales of 520kt.
I have totalled all other expenses (depreciation and amortisation, corporate, admin, exploration, etc) using 2021FY numbers plus a 5% inflation adjustment, debt is fixed at 5% and the new finance package of AUD$7,369,000, thus total estimate of - AUD$57,682,000. These totals exclude one-off items, such as, acquisition and refinancing expenses from last year, and depreciation and amortisation has not been inflation adjusted, noting these items are typically non-cash expenses, but are included for completeness’ sake.
So, let’s go;
| 1 | | Revenue from Term Contract Sales | 8,888,000 |
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| 2 | Revenue from Spot Sales | $343,040,000 |
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| 3 | Operating Cost of Sales | ($273,000,000) |
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| 4 | Cash Gross Margin/(Loss) | $648,928,000 |
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| 5 | 1. Other Expenses + Debt | ($ 31,572,000) |
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| 6 | 2. Depreciation & Amortisation | ($ 26,110,000) |
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| 7 | 1 + 2 Total Other Expenses | ($ 57,682,000) |
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| 8 | Profit Before Income Tax Expenses | $591,246,000 |
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| 9 | Carried Forward Losses | ($251,000,000) |
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| 10 | Profit After Carried Forward Losses | $340,246,000 |
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| 11 | Income Tax Expense @30% | ($102,073,800) |
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| 12 | Projected Net Income for the Period | $489,172,200 |
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In terms of cash in the bank, if I'm correct, you could addback $26,110,000 of depreciation and amortisation to the bottom line, so just over AUD$1/2 bill based on the above assumptions.
At end of September the company had $137 mill cash at bank, therefore if the above numbers come through (which I expect will be better than my conservative spod pricing) there is plenty of free cashflow to fund expansion, Calix progression, start to pay down debt from Oct next year, and maybe take on further debt (convertible bond) for the POSCO JV.
On that last note, and dependent on what the JV will pay for spod supply, it may be best to just sell spod for the foreseeable future, because I expect higher margin from spod sales, as there is a cut-off point wrt spod and chem prices on a 70/30 JV basis. When new supply comes online and prices normalise, the JV will be more attractive, rather then just selling spod.
While Calix tech is not here yet, I‘m pretty confident that the midstream salt will be a decent % of our overall product portfolio, and maybe in the not too distant future, the company won’t have to worry about spod pricing, instead will only need to focus on cost of spod production, relative to the margin derived from midstream salt.
(20min delay)