Good News & Bad News, page-44613

I’m going to take a stab at predicting the quarterly data. Of course, I hope I’m wrong, and it’s better than I predict, but here goes.

For Q3 (the March Quarter, straight from the quarterly presentation):

1. We produced 179K dmt

2. We shipped 165.1K dmt

3. Realized price for SC5.2 was U$804

4. Pre price adjustments, operational income was A$72M

5. We got hit with A$218M in price adjustments due to the downward price adjustments throughout Q1.

My estimates for Q4:

1. We produced at least 180K dmt, perhaps as much as 195K dmt (I’ll explain that below).

2. We shipped 222K dmt (I got this straight off the running totals on @nightflyer's thread, though that includes a shipment on 29 June and another on 30 June, so not sure if they’ll be recognized, but I assume they will)

3. The average SMM price for SC6 between April and June was approximately U$1,050, so I anticipate a realized price in the range of U$910

Assuming that these numbers are close, this will result in revenue of just over A$300M. Assuming that there is no improvement on our all-in costs (CIF) of A$789, this would result in operational income of almost A$128M, pre price adjustments.

I make that “pre price adjustment” note because, from Q2 to Q3, realized price went down from U$1,113 to U$804, whereas from Q3 to Q4, I am estimating that realized price will go up from U$804 to U$910. A decrease downward of U$309 resulted in a A$218M loss, and we shipped ALMOST the same volume in Q2 and Q3, so I would expect a price increase of U$106 to result in an upward adjustment of approximately A$75M. That would take operational income, with price adjustments, up to just over A$200M.

We’ll know how accurate I’ve been in less than 24 hours.

As a final few notes, I’d like to see if there are any major updates regarding the POSCO JV, especially as regards to the increase in equity from 18% to 30%. As per the terms of the agreement, we can soon buy that 12% increase at cost, whereas if we wait until the JV’s product has been approved by an OEM, the cost becomes “market value,” which is almost always higher than “cost.”

I’m also curious to see if there are any updates on the CALIX JV. Calix has been tight, recently, and I’d really like to see PLS buy them out of the JV (with purchase of the IP, of course). I’m guessing we could get it at an excellent price, right now.

Best regards, all!