the investment case here is based on the thermal coal price.
for bengalla last year if we estimate sales averaging 80usd and costs at 50 usd then for 6MT we get profit of 180 usd = 240 Aud last year.
this year if we estimate sales at 70usd and costs at 50usd then off 8MT we get profit of 160usd = 240 mil AUD
anything from NAC is a bonus to pay off the new debt.
240/1500 = 6.25x
so its not crazy cheap even after the price reduction. But this ignores profit from Bridgeport, NAC, Surat etc.
So for me its quite a safe bet. If prices fall further then no one else will invest leading to higher prices. And if prices rise then good news for NHC too. NHC is a low cost high quality producer and I think there is demand for their product for at least 20 years.
NHC Price at posting:
$1.86 Sentiment: Buy Disclosure: Held
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