Ann: Share Placement to JFE Shoji Corporation, page-64

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Capybara

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10/12/23

23:54

Post #: 71374238
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Originally posted by King87: ↑

instead management decided it was a good idea to convert 4 furnaces during a energy crisis when commodity prices were at high lvls. Thereby foregoing profitable production. In the process they wrote off 10mil usd, and paid for the conversion.

ironically, the older ferrosilicon furnaces seem to be of equal profitability to the current manganese ferroalloy furnaces that were converted. So it was all for nothing. Busted up 50mil aud, or whatever it was. To do the conversion. Lost out on maybe another 20k per annum per furnace x 4. 80k tonnes of ferrosilicon that likely made 800 to 900 used per tonne at the time. The conversion cost and lost production likely lost them 100m to 150m in profits.

then major maintenance was done during the peak of the energy crisis, so thats another year of operating at 75% when prices were good. In the presentation management mentioned that major maintenance had to be done anyway.

but oddly enough, their decision to do the maintenance was in 2022, but they recently postponed the last 2 furnaces to 2025. So theres a 3 year gap between certain furnaces.

super frustrating as i would have exited a couple of years ago and got into some other opportunities, many which have gone up.

the asset is good, its really undervalued. But these bad decisions...

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Elkem share price same trend as OMH, also bad decisions or maybe related to underlying market fundamentals?

OMH Price at posting: 45.0¢ Sentiment: Buy Disclosure: Held
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