Seems to be making FCF of between 200 to 250m per annum on rough calculations, depending on how one accounts for the con notes. After backing out cash on hand, nearly 10% fcf to EV, with growth from current 11.5mtpa ish to 14mtpa in 3 years, at not bad mid cycle prices. Hopefully some higher cost operations begin dropping out.
There are a few factors in the last quarterly that gave me pause, and may not be factored in. The new New Acland pit is going to consume capital, and yields of low ash have risen dramatically, affecting realizations relative to NEWC 6000 and API5500. I also read somewhere about sustaining capital works at Newc port, would love if anyone else can shed light.
All in all, I think people are still sleeping on this, as in the short term, all else remaining constant as it never does, the FCF is going to jump between 30 - 40%, seeing the 100m buy back sustained indefinitely as well as the 186million (19c) dividend. That is assuming it's all sunshine and rainbows at all operations and the rail issue is sorted.
NHC Price at posting:
$3.84 Sentiment: Buy Disclosure: Held
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