Here is my best effort at a rough floor valuation for FMG based on the following:
1) 55 mtpa in FY 08-09 and 80 mtpa by end of 10
2) Conservative margin per tonne: $40-50
Based upon:
FMG contract prices based on BHP/RIO negotiated FOB price (c $85 for fines;$130 for lump) minus Cost of production (Charlie Aitken has a figure as low as $25/t)
Gives:
EBIT of 3200-4000m
3) Allowing $200m interest on <$2b of interest bearing debt
4) Minus 2000m for expansion to 80mtpa fully funded from 2010 cashflow
5) The full 30% corporate taxation (ie disregarding already booked offset losses)
Gives:
2010 NPAT of 1000-1800m
and 2011 NPAT of 2100-2650m
6) Allowing for vesting of 293 million 'four year of service employment bonus shares' and existing 2.8b shares on issue;
7) Discounting EPS by 4% to account for Leucadia's right to revenue until 2019
Gives:
EPS for 2010 of 21.5 - 38 cps
and EPS for 2011 of 64.5 - 81 cps
Placing the company on a low PE of 8, and discounting back 2011 earnings by 10 p/a%, still gives a SP of almost $5.
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$21.62 |
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Mkt cap ! $66.56B |
Open | High | Low | Value | Volume |
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No. | Vol. | Price($) |
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7 | 15504 | $21.61 |
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Price($) | Vol. | No. |
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No. | Vol. | Price($) |
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8 | 5180 | 21.600 |
3 | 1258 | 21.580 |
3 | 1995 | 21.570 |
2 | 450 | 21.560 |
Price($) | Vol. | No. |
---|---|---|
21.650 | 1000 | 1 |
21.750 | 7200 | 2 |
21.760 | 1000 | 1 |
21.770 | 179 | 1 |
21.800 | 4913 | 6 |
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