Scarcely believable the impact of the tabloid press in terms of the SP action.
The statutory result is negatively impacted by the arcane accounting standards that write off the goodwill on lithium C&M decisions and a translation loss on USD loans. All in all it was a solid result with commodity prices on the floor and Onslow completed, in production and fixing teething issues.
On a cash flow basis, which the banks use to eliminate the extraordinarily contrived accounting standards they were negative $188m with growth capex of $1,057m, so positive $869m excluding cap investment.
That is what the analysts will focus on and the achievement. They are in a risky scenario and do need to pay down debt, but it is managed risk that generates shareholder returns and that is CE's core competence.
FY25 guidance softened through cyclone season since the last qty by between 16% and 20%, and all of that had been discounted and more.
Going forward on an annualised basis, Mining Services will crank out EBITDA of $800m and Onslow will produce 36mtpa at (using the half year average USD83 revenue and targeted FOB cost of $45 ) a gross profit of USD54 per ton is USD1,944 is approx AUD3bn.
So ongoing Gross profit of $3.8bnpa, excluding breakeven Lithium is still a very serious return and is now largely de-risked, with IO profitable down to AUD45.
This has to be the point where the uber sage Buffett says be greedy, with SP down 11% today on top of a disastrous MTD, so off 17% in total.
Good Luck!
Wazz
MIN Price at posting:
$27.71 Sentiment: Buy Disclosure: Held
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