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.
The market is pricing the company based on what information the...
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