This management is implicitly saying we don't need to be like a normal company. We can continue as a quasi privately listed company...which frankly it has become with all those Singapore shareholders. And we will continue to buy back our shares from anyone tired of our management quality. We are NZ's biggest mining company and we don't need to bother about pesky minority shareholders.
Of course what they forget is that it is ONLY high coking coal prices that saved their skin...otherwise the L&M verdict would have been destroyed them for a long time to come. I can't see any reason why management can claim any credit for their currently large cash flows.
If anything, as I have pointed out...they have done their best to reduce our cash flow by this misguided "hedging" policy. How foolish the assumption that US$185 coking coal price is "super high margin" is the fact that the June 2019 future price (this financial year end) is at US$193...and that even Dec 2019 comes in at US$188...well above their assumption of "super high margins". Talk about a management that has scored a massive self goal...and proudly claims that it is all "risk management at all levels", and in this case "market risk management" (page 12 of last pitchbook).
Could it be that the market is taking a jaundiced view of not only BRL, but of Jacinda's New Zealand? That NZ simply does not want any mining, particularly of coal, going on there? The webpage of BRL now boldly says "Mining for the Good of NZ". I don't recall any such headline till recently. For most mining companies, good corporate citizenship slides come at the very end of any pitch book. For BRL, it is on page 7!
Incidentally, NZ PM Jacinda Arden is on Bloomberg TV tomorrow (Thursday) at 1115 am Sydney time. It will be interesting to see what she says about mining in NZ.
The other possibility is that the market is saying that coal stocks are going to remain like cigarette stocks...and will remain perpetually cheap.
BRL Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
(20min delay)