The market is pricing the company based on what information the management provides.
14 mt coal owned by Cokal 6% sales royalty paid to Eddie Average realisatoion at current price - pre Eddie Royalty = $185/t Average realisatoion Net of Eddie Royalty = $174/t Average cost of production = $150-160/t EBIT margin -- pre tax, pre interest expense = $14-24/t Monthly volume = 2 barges operating at 4000/t x 2x = 16,000 tones Estimates days of operation = 250 days = 8 months Annual coal sales volume = 16,000 x 8 = 128,000 tonnes Annual EBIT margin = US$1.8-3.0 mn Net Income = say 50% of that post interest and tax = US$900k - US$1.5 mn Market Cap = US$ 63 mn P/E ratio - 42x - 71x
Super High P/E ratio at very good coal prices.
Peak pricing and peak multiple ! == EXPENSIVE at current disclosures and operation.
People who overlook the other side of the argument -- have their head in the sand.
CKA Price at posting:
9.1¢ Sentiment: None Disclosure: Held
