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Expectations for June Quarter, page-5

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Hiepn2_2005

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01/06/23

06:57

Post #: 68068841
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Originally posted by Glpg: ↑

With dividend announced, keen to get thoughts on how we are likely tracking for June.

Keeping it really simple and conservative:

Jun-23 Quarter
Modest recovery to 460kt sale for BA (should do better)
Avg sale price of A$210/t incurring avg royalty costs of $25/t
Diesel/elect & op costs of A$95/t (slightly better than last quarter due to volumes)
EBITDA of A$90/t
Total Australia EBITDA of A$41.4M
Small contribution from South Africa bringing to total A$45M ($180M annualised)

Beyond June
Get back to minimum 500kt per quarter (should do better)
Avg sale price of A$170/t incurring avg royalty costs of $16/t (I see this as likely worst case)
Diesel/elect & op costs of $95/t (can definitely do better here also)
EBITDA of A$59/t
Total Australia EBITDA of l $29.5M ($118M annualised)
Probably no meaningful contribution from South Africa

Current market cap A$410M. Negligible debt.

Still seems a bargain, unless you think coal price are going back to $US75/t, in which case the annual EBITDA would only be around A$25M at which point the wheels are falling off. Probably looking at $US85/t revenue being the cut-off point at which the business is not really sustainable long term.

A bit too much effort to estimate net cash but would be keen if anyone has worked it through?

I also note that "restricted cash" was $51M in Dec-22, and the last quarterly states it is grew to $67M which seems strange to me. Possibly they are aiming to reach the Qld Enviro bond level of $72M, even though it doesn't require this full amount in cash backing? Either way they have hopefully secured a much better interest rate on this also.

Anyway this was a long post but keen to test my back of envelope thinking. Hope everyone doesn't mind me starting a new thread but I think its timely and warrants separate discussion.

Not advice and no warranty on accuracy of anything in this post

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Why do we assume for the South African operation that EBITA is neglible when coal prices drop further?
I.was of the understanding that it's a fixed margin contract, like say 10-20% on cost. Hence when coal prices were sky rocketing we didn't get the full benefit but when it's falling we still make the same profit on cost.
Can someone clarify?
TER Price at posting: 49.0¢ Sentiment: Buy Disclosure: Held
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