An unfavorable result is conceivable given the market announcement in the half year. Whats changed since now and then is the price of gold and capital market interest in the commodity. The majority of DDH revenue and rig utilisation comes from Gold. Its possible that they will state under performance and forward out performance given this backdrop. The net affect would be achieving consensus. Irrespective of this dynamic DDH is undervalued on relative basis to international drillers. This makes little sense given the skew towards production, quality of management, proven capital discipline, near net cash position and favorable medium term outlook for their commodity exposures. One could easily argue that the current EV/EBITDA (x) factors in this possible under performance and therefor investors are insulated with some degree of safety.
DDH Price at posting:
90.0¢ Sentiment: Buy Disclosure: Held
