Knee jerk market reaction. Happening quite a lot this reporting season.
Plenty of good news here including around - another increase in pipeline and order book - resolution to Batu Hijau which looks nicely capital efficient - reconfirmed guidance, and - capex which highlights that after significant investment spend, cashflow should improve and ROACE get to 15% "near term" according to the CEO - ongoing risk reduction, particularly around alliance style contracts (43% now)and cost protection via rise and fall provisions in other contracts
Muktiples looks cheap:
- 0.59x book value - compared to an average of 0.92x and median of 0.75x over the last 5 years
- 1.5x ebitda - compared to average of 2.9x and median of 2.2x over the last 5 years
With cashflow improving, this stock should do well.
Risk seems to be mostly industry specific ie getting people.
IMO DYOR
MAH Price at posting:
16.0¢ Sentiment: Buy Disclosure: Held
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