It's interesting because SSM say in their 1H20 results presentation they "expect EBITDA from operations for 2H20 to be in line with that reported for 1H20, subject to a continuation of market conditions"
EBITDA for the 1H20 $58.08m. If we times this by two, they were expecting an EBITDA of approximately $116m for FY20.
The COVID-19 update says they are now expecting $108m EBITDA from operations. That is just a 6.9% decline in guidance amidst an unprecedented black swan event that we see in COVID-19.
SSM didn't have to disclose this to the market, however, they did because management felt the need to inform stakeholders during an unsettling time. Wise move. This just increases my trust in management.
I find it incredible they have only suffered a 6.9% expected decrease in EBITDA from operations, many of these being put on pause (so we can expect to see revenues from these contracts slowly continue as confidence is put back in the market).
This is a boring, defensive stock, delivering consistent returns for shareholders. Hold for 3+ years and you will be rewarded.
SSM Price at posting:
$2.07 Sentiment: Buy Disclosure: Held
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